{"id":11065,"date":"2011-01-19T15:22:15","date_gmt":"2011-01-19T15:22:15","guid":{"rendered":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/?p=11065"},"modified":"2019-08-05T15:25:36","modified_gmt":"2019-08-05T14:25:36","slug":"questionable-insolvency-transactions","status":"publish","type":"post","link":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/questionable-insolvency-transactions\/","title":{"rendered":"Questionable Insolvency Transactions"},"content":{"rendered":"\n

Antecedent Transaction and Transaction at an Undervalue<\/h2>\n\n\n\n

In the lead up to an insolvency process, it is important that the debtor ensures that he behaves honestly, honorably and fairly in his or her dealings with all other parties who may be affected by the process. <\/p>\n\n\n\n\n\n\n\n

Any activities involving creditors or any third parties (not being creditors) which may negatively affect the interests of creditors are of particular concern, whether creditors are party to the transactions or not. Insolvency processes include Bankruptcy, Individual Voluntary Arrangements, Company Voluntary Arrangements and Liquidations and so on. There are two main types of dodgy transactions:<\/p>\n\n\n\n

\"Questionable<\/figure>\n\n\n\n

Antecedent Transaction and Transaction at an Undervalue.<\/p>\n\n\n\n

Antecedent Transaction<\/h2>\n\n\n\n

An Antecedent Transaction arises where, prior to the insolvency \nprocess commencing, something is done which results in one creditor \nbeing treated more favourably than the other creditors or where a \nnon-creditor benefits from the actions of the debtor or of the company \nundergoing the insolvency process resulting in the suffering of one or \nmore of the creditors.<\/p>\n\n\n\n

In such circumstances the official receiver or liquidator of the \nestate may have the right of recovery. The rules relating to an \nAntecedent Transaction vary somewhat depending on the type of insolvency\n process. In the case of a bankruptcy, for example, if one or more debts\n have been paid or substantially reduced in preference to others, the \nofficial receiver may be able to recover from the preferred creditor(s) \nthe monies paid preferentially in this way.<\/p>\n\n\n\n

Transaction at Undervalue<\/h2>\n\n\n\n

A Transaction at Undervalue arises where goods or services are sold \nor transferred to another party at less than their true market value. In\n an insolvency process, if any goods are purposely disposed of at \nundervalue to avoid them being seized by the trustee in bankruptcy and \nrealized for the benefit of creditors, the trustee may have the \nauthority to claim such goods back from their new owner(s). Again there \nare different rules relating to a Transaction at Undervalue depending on\n the type of insolvency process and on other factors. In bankruptcy, for\n example, the Transaction at Undervalue must have occurred during the \nfive years prior to the presentation of the bankruptcy petition and \nwhere the transaction took place in the period of two to five years \nprior to the petition, the bankrupt must have been insolvent at that \ntime or become insolvent as a result of the transaction and it falls to \nthe trustee to prove that that was the case. An exception to this burden\n of proof arises where the transaction involved an associate of the \nbankrupt: the trustee does not have to prove the insolvency of the \nbankrupt \u2013 there is simply a presumption that that was the case. \nAssociates include the bankrupt\u2019s spouse, or a relative or a relative\u2019s \nspouse of either the bankrupt or of the bankrupt\u2019s spouse.<\/p>\n","protected":false},"excerpt":{"rendered":"

In the lead up to an insolvency process, it is important that the debtor ensures that he behaves honestly, honorably and fairly in his or her dealings with all other parties.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[6],"tags":[],"class_list":["post-11065","post","type-post","status-publish","format-standard","hentry","category-general-debt-articles"],"_links":{"self":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/11065","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/comments?post=11065"}],"version-history":[{"count":1,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/11065\/revisions"}],"predecessor-version":[{"id":11071,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/11065\/revisions\/11071"}],"wp:attachment":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/media?parent=11065"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/categories?post=11065"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/tags?post=11065"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}