Not disclosing credit when going bankrupt

Muzza_2

Someone I know who went bankrupt appears to have retained a credit card and started using it again. :mad:

Obviously I'm not impressed with this however before I say anything to them about it I want to know the legal aspects of this.

In not declaring this credit facility during the bankruptcy process have they committed fraud or broken any law and what could be the potential repurcussions if found out?

I would imagine the CC company would not be happy about not being informed they had been made bankrupt

Thanks,

Northernbird_2

Whilst I am not an expert on bankruptcy, and someone else here may be able to give you more accurate advice, as far as I know it is considered an offence to

a) not declare credit when petitioning bankruptcy
b) applying for credit of more than £500 without informing the company that you're an undischarged bankrupt

I think the second point is an offence regardless of whether the cc company asked them directly or not.

It's pretty serious, and I think it can result in a fine and/or jail sentence (though whether that would be suspended or not is a completely different matter).

I don't know the details of why your friend is bankrupt but if there is a risk they could not cope with the increased debt they're getting into again, and it then goes to bankruptcy, then the repercussions would be very serious indeed. The courts have the power to increase the length of time before discharge to up to 15 years if they feel it as a result of reckless spending or deliberately getting into debt to then declare bankruptcy to get rid of the debts.

You're a good friend to worry, and if you can explain to them the repurcussions maybe they'll listen. There are a number of leaflets from the FSA etc, that will explain more accurately what could happen.

Hope this helps.

Entrepreneur_en_faillite

Muzza- this person you know is committing a criminal offence and if their OR finds out there will be VERY serious consequences.

Muzza_2

Ok, thanks for that, I suspected as much that it would be an offence.

I think there may be a store card as well, having never had one I don't know but do they come with a limit or do they just allow you to rack up the purchases?

I'm not sure if they got this afterwards or not.

inmypocketnottheirs

You may find more information at https://www.insolvency.gov.uk

Entrepreneur_en_faillite

Muzza......

This is a direct quote from the Insolvency guide:

8. What are the restrictions on a bankrupt?

The following are criminal offences for an undischarged bankrupt:

obtaining credit of £500 or more either alone or jointly with any another person without disclosing your bankruptcy. (Note: this is not just borrowing money - it includes your getting credit as a result of a statement or conduct which is designed to get credit, even though you have not made a specific agreement for it. For example, ordering goods without asking for credit and then failing to pay for them when they are delivered);

Very Naughty behaviour!!!!!!!!

BTW store cards are similar to credit cards in as much as they have a credit limit that you can spend up to, and they are treated in the same way in regards to bankruptcy.

This person you know is being very very silly.

Muzza_2

cheers for that, I'll now have to try and talk some sense into them!

Addicted2Chocolate

Deliberately failing to include all creditors in the statement of affairs would be an offence, i think contrary to section 356(1) of the Insolvency Act 1986 False Statements, 'the bankrupt is guilty of an offence if he makes or has made any material ommission in any statement made under any provision in this Group of Parts and relating to his affairs'

the obtaining credit over £500 without disclosing his status as an undicharged bankrupt is an offence contrary to Section 360 (a) of the Insolvency Act 1986.

So he could be prosecuted and also subject to a Bankruptcy Restrictions Order, s the conduct is after 01 April 2004. If granted the court could make him subject to the restrictions of bankruptcy for up to 15 years.

ms_london

It makes you wonder how they managed to obtain a credit card!!!!!

Behaviour like this annoys the hell out of me, it really does!!

ms_london

sandymogs wrote:

I know a woman who deliberately totted up a load of credit card/store cards on unnecessary items and made herself bankrupt twice! I don't know how she did it, but she has changed her name a few times through 3 marriages in the last 8 years!

She has been using credit cards again recently (like there's no tomorrow) and has just come back from a holiday to Australia. I bet she will have her debts written off again!

I think she is committing some form of fraud but I don't know exactly how she does it. I am determined to find out, because she is not going to get away with it this time!

I would report her if I were you. Not sure who to or how, but why should she get away with it? Grrrrrrrrrrrrr!!! I hope she gets her come uppance!!

Entrepreneur_en_faillite

sandymogs wrote:

I know a woman who deliberately totted up a load of credit card/store cards on unnecessary items and made herself bankrupt twice! I don't know how she did it, but she has changed her name a few times through 3 marriages in the last 8 years!

She has been using credit cards again recently (like there's no tomorrow) and has just come back from a holiday to Australia. I bet she will have her debts written off again!

I think she is committing some form of fraud but I don't know exactly how she does it. I am determined to find out, because she is not going to get away with it this time!

This type of thing really makes my blood boil, do these people have no conscience. I am going through hell struggling with my bankruptcy, complete with antidepressants and sleeping pills, and then you get people like this who just use the system. She should be locked up in jail.

:mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: