Taking out a loan then declaring bankruptcy

sparkle83

Here ya go

"Fraud by false representation" is defined by Section 2 of the Act as a case where a person makes "any representation as to fact or law ... express or implied" which they know to be untrue or misleading

en.wikipedia.org/wiki/Fraud_Act_2006

umgeni

tmcd01 wrote: »

"You would almost definately get a BRU/BRO"

What is a BRU or BRO?

fiveyearplan

Bankruptcy Restrictions Order/Undertaking. It means that the restrictions of bankruptcy last beyond discharge.

Bethankim

Jonathan - as you mentioned me directly please go look at the insolvency register - look at BRO/U register and have a look for yourself at the penalties for your hypothetical actions..im not making a moral point - i simply replied to your question.

here are a few links i found where people taking out more credit when they knew they were insolvent had restrictions placed upon them. as others have pointed out, the OR has access to all your financial affairs and will look at them. It is of course up to you - but you asked and i answered :rolleyes:

http://www.insolvency.gov.uk/databases/ddirector/viewbrobrudetailsmore.asp?courtnumber=5755052008

http://www.insolvency.gov.uk/databases/ddirector/viewbrobrudetailsmore.asp?courtnumber=4253812008

http://www.insolvency.gov.uk/databases/ddirector/viewbrobrudetailsmore.asp?courtnumber=525708892008

http://www.insolvency.gov.uk/databases/ddirector/viewbrobrudetailsmore.asp?courtnumber=5774482007

JCS1

Quite a few people have done this before and faced the full implications, so there are many precedants.

OR will apply for a BRO/BRU, and knowing that the loan was taken out to clear a Student Loan (which is not covered by BR) it would a lengthy BRO.

OR would also investigate all finances very carefully.

The loan company may also make a complaint of fraud, as the loan was taken out with no intention of paying back. OR and Police do co-operate with each other.

RichesToRags

It's not a morality issue per se, it's a legal issue. You would be obtaining credit under false pretenses, probably would come under fraud and deception.

As Miche said the OR specifically asks if you were insolvent at the time of applying for or using credit.

You could end up paying 3 fold, the OR could claim the money back and distribute between your creditors without prejudice, you could find yourself getting a BRO and the loan company could prosecute for fraud resulting in you paying them back and you'd stil be left with the student loan to repay. Not forgetting a criminal conviction to hang on the wall next to your BR.

FraudBuster

The Fraud Act 2006.

http://www.opsi.gov.uk/acts/acts2006/ukpga_20060035_en_1

peachyprice

Thanks FB, it'll be this bit primarily then

Obtaining services dishonestly

11 Obtaining services dishonestly

(1) A person is guilty of an offence under this section if he obtains services for himself or another—
(a) by a dishonest act, and
(b) in breach of subsection (2).

(2) A person obtains services in breach of this subsection if—
(a) they are made available on the basis that payment has been, is being or will be made for or in respect of them,
(b) he obtains them without any payment having been made for or in respect of them or without payment having been made in full, and
(c) when he obtains them, he knows—
(i) that they are being made available on the basis described in paragraph (a), or
(ii) that they might be,
but intends that payment will not be made, or will not be made in full.

(3) A person guilty of an offence under this section is liable—
(a) on summary conviction, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum (or to both);
(b) on conviction on indictment, to imprisonment for a term not exceeding 5 years or to a fine (or to both).

Hope that's clear enough for you OP, that your suggestion is committing fraud.

jonathon01

Thank you all for your information and links to both the relevant part of law and recent examples of BROs where the bankrupt has done what I was mooting. The BRO examples are a clear indication of what could happen so definitely not worth considering this route. It is certainly a good idea to research what is and isn't possible before getting yourself in a legal situation from which you can't retreat!