Back in 2008, I lent a friend £10,000 to help him buy a business. Earlier this year, he was declared bankrupt, but he repaid me in full about a month before that. Now, I just got a letter from solicitors acting for the official receiver saying I have to pay the £10,000 back because I’m in a ‘better position’ than other creditors. They quoted sections 340 and 341 of the Insolvency Act 1986. Is this legit? I had nothing to do with the business itself—just helped a friend out. This feels really unfair, and I honestly need that money myself now. Has anyone dealt with this before? What are my options?
Jo said:
Yeah, unfortunately, under bankruptcy law, one creditor can’t be treated better than others. That’s why they’re asking for the money back.
Ugh, so basically, because he paid me back before going bankrupt, they see it as unfair to the other creditors?
Did you have any official agreement or was it just a handshake deal?
Clive said:
Did you have any official agreement or was it just a handshake deal?
Just a verbal agreement. We were friends, so I didn’t think I needed anything official…
That’s brutal. I get why the law exists, but it really sucks when you’re just trying to help someone out.
Wait, what do they mean by ‘set off’ against a claim? Does that mean you could argue you were owed the money in another way?
Are you going to fight this? Or just pay it back?