Bankruptcy Fraud Explained

What is bankruptcy fraud?

Bankruptcy fraud happens when you deliberately lie or fail to disclose information regarding your finances on your application or whilst your bankruptcy is being processed. Hiding assets, such as properties or foreign vehicles is another form of bankruptcy fraud.

Bankruptcy fraud is taken incredibly seriously and if you are found guilty, you will either have your first restriction period extended or you could be fined, prosecuted and in worst case scenarios, sent to prison.

What offences should you be aware of? 

It’s imperative before applying for bankruptcy and during the process that you carefully keep an eye on your finances to ensure you haven’t committed any of the following bankruptcy offences:-

• Intentionally providing incorrect contact details

• Lying or not including any key details about your finances while completing your bankruptcy application or when discussing your bankruptcy with the Official Receiver.
• Leaving the country (England or Wales) with possessions that are worth above £500 that should be given to the Official Receiver to use as part of your bankruptcy
• Selling or giving away property that you obtained with credit such as a mortgage (this applies for up to 5 years prior to you having made a request for your bankruptcy)
• Trying to benefit someone, such as a creditor by giving them preference over another creditor. If it is deemed that preference has been given this can be overturned (if this took place at any time up to two years prior to the bankruptcy)
• Applying for credit of £500 or more without informing the appointed Official Receiver
• Concealing details of any property you own or are involved with from the Official Receiver

When you sign the declaration on your bankruptcy form you are confirming that everything you have included is fully correct and in order. If it is discovered that untruthful information was provided or any relevant information purposely witheld, you will be investigated and prosecuted.  

What will happen if you are found guilty of bankruptcy fraud? 

Bankruptcy fraud is a criminal offence and you could be either fined or sent to prison. You will also have a bankruptcy restriction order placed upon you, which means the restrictions of your bankruptcy will continue for up to 15 years.

What are bankruptcy restrictions? 

Bankruptcy restrictions mean you have to adhere to specific rules when it comes to your finances and work life:-

• You are prohibited from setting up a new company or act as a director without permission from the Court
• You cannot set up a business in a different name to the one you were made bankrupt with, without telling people that you have been made bankrupt
• You cannot take on any credit of £500 or more without permission from the Court
• You cannot act as an insolvency practitioner or work in specific financial sectors

Conclusion 

If you want to find out anything further about this topic then please feel free to call me on 0330 236 9930, 0330 236 9938 or 07961 116321. All conversations will be in strict confidence. You can also email me vee@navigatebr.com.

This article is for information and interest only. It is not a substitute for full professional advice, which will take in to account the specific and individual circumstances. Navigate Business Recovery Limited cannot accept any responsibility for any loss arising as a result of any person or organisation acting or refraining from acting on any information.