Maintenance payments: ascribed to arrears first?
How to determine whether maintenance payments by a petitioner since bankruptcy should be ascribed to arrears or ongoing obligations?
In Hill, Petitioner [2015] CSOH 36, the debtor petitioner argued that as a matter of common sense there was no basis for ascription of his payments to anything other than arrears, and charges for payment relating to the arrears should be suspended.
Lord Stewart analysed informal communications between the parties, including emails, together with spreadsheets and bank statements to conclude that there was no shared understanding that payments were intended to pay off arrears. From the evidence it appeared that parties had a shared intention for the payments to represent ongoing maintenance.
The petitioner required to make it clear that the intention of his payments was to reduce the arrears, but email exchanges negated that proposition.
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