Business Loan Question

andreap1984

If somone took out a business loan (but lied about the amount of money the company was turning over in order to get a loan), where would they stand in bankrupcty?

Would they be done for fraud?

FraudBuster

The Fraud Act 2006.

http://www.legislation.gov.uk/ukpga/2006/35/contents

andreap1984

FraudBuster wrote: »

The Fraud Act 2006.

http://www.legislation.gov.uk/ukpga/2006/35/contents

Thanks for this, however, I will admit that legal jargon makes absolutely no sense to me.

It isn't my business nor have I taken out a business loan this is for a friend who has been advised to go bankrupt however he is worried that he will end up being done for fraud for taking out a government backed loan (but he only got the loan as he lied about the amount of money the company was turning over)

Should he therefore not declare himself bankrupt?

lilibet1

i would think and i could be wrong but if he needs to go br he should. I also think regarding the "fraund" then he would get a bro/bru? Can anyone else confirm this without scaremongering.

x

confused76

it's hard to say, perhaps they could call the Business Debtline http://www.bdl.org.uk/

debtinfo

Obviously every case is looked at on its own merits and i cant say specificaly because i dont know all of the facts.

But if it is found that he has commited fraud and lying on an application form to obtain money can be considered fraud, then 2 things can happen, firstly the debt can be excluded from the bankruptcy so it is still payable. Secondly as well as a BRO/BRU (this is a civil matter) the OR can pass the case on for prosecution (a criminal offence) for which the punishment can be a fine and in very serious cases imprisonment.

Its all a question of scale, intent and provability

lilibet1

how much are you talking of? x

andreap1984

lilibet1 wrote: »

how much are you talking of? x

The amount borrowed was £20,000

He did use it for the business and towards living costs as he wasn't earning an income. The fact is that he owes quite a lot out to various creditors and really needs to declare himself bacnkrupt but the question is will he end up being sent to prison

Not making excuses but surely there must be other people who have lied or bent the rules slightly in order to obtain credit. People lie about how much they earn to get bigger mortgages - is this not similar?

dojoman

I don`t think anyone can give you a definitive answer, all cases are handled differently as all OR`s are different, have they taken any advice over this matter?

lilibet1

Hi andrea

I dont know what to say, and i really want to say something positive. I suppose, that like you say lots of people bend the rules to some extent, would this be picked upon anyway?

Looking at it another way, we see people regularly being taken to court for the same amount for benefit fraud and be given community chores (cant remember the word) has the op been in trouble before for this type of thing?

Im so sure that someone else will be along soon.

x