Bankrupts must disclose all assets, no matter how small, or they face a penalty which could include having their period of bankruptcy restrictions increased by up to 15 years instead of the usual 12 months. The Official Receiver will also seek to recover such assets.
The new warnings have been prompted by a surge in cases dealt with by Official Receivers where potential bankrupts have attempted to put assets out of reach of their creditors – up to nearly 200 cases this year compared with just 28 in 2008-09.
Recent cases exposed by The Insolvency Service include bankrupts who failed to disclose cash, insurance policies and even cars to the Official Receiver. All were found out and had their period of bankruptcy restrictions extended. This meant that their ability to borrow, manage a company or even stand for the local council remained limited by the insolvency rules for even longer (see notes).
Senior Official Receiver for the Insolvency Service in Great Britain, Les Cramp, said:
“The Insolvency Service always acts if we think it is in the public interest to do so. It is only fair to the creditors that we seek full disclosure of any assets that might be available.
“Potential bankrupts who want the debt relief offered by this form of insolvency must declare all of their assets straight away. It is then for the Official Receiver to decide which assets must be sold for the benefit of the creditors and which might be retained by the debtor.”
Picture Credit: Insolvency Service.
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