Crafty Stupidity
Many people these days are considering bankruptcy as their best option to be relieved of their debts, and some are also looking at other options. But one thing I do hear a few times a week is not so much how to avoid bankruptcy, but how to manipulate it.
Can I transfer my house to my brother before going bankrupt?
Can I sell my car and hide the monies I make and then go bankrupt?
How can I go bankrupt and not disclose this, or the other?
Can I pay off a debt to a family member prior to going bankrupt?
How will the Official Receiver know if I get a bonus, or win the lottery during my bankruptcy?
How can I, will they know, is it wrong if I....and the questions go on.
So before you ask and to put anyone’s mind at ease, no we/I do not advise on these matters. Plain and simple it is fraud and I do tell them they are on a slippery slope.
As to any question that begins with, how will they know, I usually answer, they will know. There are various checks and balances within the system and if you defeat those, it is not a game and you have won, it just means you did not get caught! Yet!
And if you are such the gambler that is willing to take that chance, and you lose and get caught, the price and penalty can be high. You could receive a BRO/Bankruptcy Restriction Order, which can keep you in bankruptcy for up to 15 years, as opposed to the usual 12 months/1 year; in addition, the OR has the authority to reverse various transactions.
So let’s use the example of someone paying off a debt to a family member, we will say the debt is £4000, and they pay off their brother who had lent them some money. Then they decide to go bankrupt and for whatever reason, the Official Receiver finds out about this. By paying off a family member, or anyone for that matter, and going bankrupt, means you have preferred that debt over all others; which is not allowed or fair. So the OR can contact the brother and ask for the £4000 back. If the brother no longer has the £4000, the OR can chase them for this money and in the extreme case, make them bankrupt.
So now, you are bankrupt, and your brother is being chased for money and may be made bankrupt as well. Now is that anyway for a family to behave? It would make family tea a bit more interesting.
The same thing can occur if you transfer property or any asset prior to going bankrupt. It can be perceived as manipulating or hiding an asset and the transaction can be reversed. Then whomever you gave the property to may be forced to move or buy out the property. It just gets a bit ugly when this occurs. You may feel you are doing it for the right reasons, but it is wrong.
Another question people ask, and it is sort of related to what I am discussing here is, can I just leave the Country, do a runner and go and not pay anyone. The answer to that is, it is really up to you, but yes, it can be done. Not the best way to resolve the situation or get any closure, but it can be done. The issue here is your creditors may chase you for the debt, and/or sell the debt to a collection firm in another Country to show up on your new doorstep and demand payment. It can be done, but not the best option.
But, I digress.
Prior to going bankrupt you need to be cautious as to the transferring of any property or assets or of continuing to use credit, as if you know you are insolvent and facing bankruptcy this can be seen as a misuse of credit. And another reason you may receive a dreaded BRO.
When filing out your forms for bankruptcy you need to be as honest about matters as you can be, and again if you need help with the forms, get it!
So let’s get off this slippery slope and onto firmer ground. And if you need help to do it right, just ask me for help. Going bankrupt should be a time of closing a door on a part of your life and not leaving it open so you are always looking over your shoulder, waiting to get caught.
Can I transfer my house to my brother before going bankrupt?
Can I sell my car and hide the monies I make and then go bankrupt?
How can I go bankrupt and not disclose this, or the other?
Can I pay off a debt to a family member prior to going bankrupt?
How will the Official Receiver know if I get a bonus, or win the lottery during my bankruptcy?
How can I, will they know, is it wrong if I....and the questions go on.
So before you ask and to put anyone’s mind at ease, no we/I do not advise on these matters. Plain and simple it is fraud and I do tell them they are on a slippery slope.
As to any question that begins with, how will they know, I usually answer, they will know. There are various checks and balances within the system and if you defeat those, it is not a game and you have won, it just means you did not get caught! Yet!
And if you are such the gambler that is willing to take that chance, and you lose and get caught, the price and penalty can be high. You could receive a BRO/Bankruptcy Restriction Order, which can keep you in bankruptcy for up to 15 years, as opposed to the usual 12 months/1 year; in addition, the OR has the authority to reverse various transactions.
So let’s use the example of someone paying off a debt to a family member, we will say the debt is £4000, and they pay off their brother who had lent them some money. Then they decide to go bankrupt and for whatever reason, the Official Receiver finds out about this. By paying off a family member, or anyone for that matter, and going bankrupt, means you have preferred that debt over all others; which is not allowed or fair. So the OR can contact the brother and ask for the £4000 back. If the brother no longer has the £4000, the OR can chase them for this money and in the extreme case, make them bankrupt.
So now, you are bankrupt, and your brother is being chased for money and may be made bankrupt as well. Now is that anyway for a family to behave? It would make family tea a bit more interesting.
The same thing can occur if you transfer property or any asset prior to going bankrupt. It can be perceived as manipulating or hiding an asset and the transaction can be reversed. Then whomever you gave the property to may be forced to move or buy out the property. It just gets a bit ugly when this occurs. You may feel you are doing it for the right reasons, but it is wrong.
Another question people ask, and it is sort of related to what I am discussing here is, can I just leave the Country, do a runner and go and not pay anyone. The answer to that is, it is really up to you, but yes, it can be done. Not the best way to resolve the situation or get any closure, but it can be done. The issue here is your creditors may chase you for the debt, and/or sell the debt to a collection firm in another Country to show up on your new doorstep and demand payment. It can be done, but not the best option.
But, I digress.
Prior to going bankrupt you need to be cautious as to the transferring of any property or assets or of continuing to use credit, as if you know you are insolvent and facing bankruptcy this can be seen as a misuse of credit. And another reason you may receive a dreaded BRO.
When filing out your forms for bankruptcy you need to be as honest about matters as you can be, and again if you need help with the forms, get it!
So let’s get off this slippery slope and onto firmer ground. And if you need help to do it right, just ask me for help. Going bankrupt should be a time of closing a door on a part of your life and not leaving it open so you are always looking over your shoulder, waiting to get caught.
