Bankruptcy offences in UK

Bankruptcy or insolvency is a condition when a person or company is unable to meet its debt obligation which it owes from his creditors. The laws meant to handle such scenarios are quite rigid. For example, in UK if the behavior of the bankrupt person is found unruly, a legal proceeding can be initiated against him leading to a bankruptcy offence. Once a bankruptcy order is passed against a debtor, all his affairs and behaviour like work, house or properties owned come under the scanner. Throughout the bankruptcy period, court tries to investigate if the concerned person has committed any bankruptcy offence or not.

Bankruptcy offences are considered very serious and a person found guilty of such offenses are not spared in most of the cases. The outcome of the legal proceedings can be very serious. However, your defense will establish the outcome of any legal proceedings. For most of the legal proceedings sued for bankruptcy offences, the person is not found guilty if the person becomes successful in establishing in the court that the facts were not concealed intentionally. If anyone thinks that he might be found guilty of a behaviour leading to a bankruptcy offence, then he should not delay to get a legal advice.

Punishment for a bankruptcy offence in the UK

Under the UK law, there is a provision for a monetary fine or imprisonment or both for a person who is found guilty of a bankruptcy offence. The person committing a bankruptcy offence can be sent for imprisonment for a period of up to seven years, depending upon the severity of the offence.

The type of behaviour leading to a bankruptcy offence

Under the UK law, there are few defined types of wrongdoings that can hold someone guilty for bankruptcy offences. These wrong behaviours are:
Fraudulent activities
Not disclosing assets
Not disclosing property disposals
Providing false documents
Concealing assets, books or papers
Breach of bankruptcy restrictions
Types of Bankruptcy Offences
There are several types of bankruptcy offences that a person can be held guilty for. Here is the list of the some of the most common types of bankruptcy offences that people often commit:

the non-disclosure of assets
concealing properties from the official receiver
failure to justify the loss of assets, if any
inability to produce or show any documents or records asked by the Official Receiver
refusal to show the documents or relevant records
concealing or destroying any documents or records
refusal to disclose anything to the Official Receiver, in full and frankly manner
disposing assets in the fraudulent manner
obtaining any credit after declared bankrupt by concealing his bankrupt status

According to the bankruptcy laws of England and Wales, a bankrupt person may be automatically discharged after a period of 12 months of the official Bankruptcy Order. However, the Official Receiver may seek a Bankruptcy Restriction Order against the person who has committed any bankruptcy offence. This restriction can last for a period of 2 to 15 years and the severity of the committed offence determines the restriction period. The Official Receiver may also seek a suspension of the bankruptcy discharge of the bankrupt person for a specific period in order to conduct further investigation into the person’s affairs. Thus, a bankrupt person should take all precautions so that he won’t be subjected to any kind of bankruptcy offences. These bankruptcy offences may further escalate the financial worries of the bankrupt person.
Bankruptcy Restriction Orders
The Bankruptcy Restriction Order (BRO) is a provision of the Enterprise Act which has been introduced recently. The objective of the BRO is to provide an effective deterrence against fraudulent acts of the dishonest and guilty bankrupts. The BRO intends to protect others from these dishonest bankrupts and the objective is not to punish these guilty people.

The Official Receiver applies for a Bankruptcy Restriction Order against a bankrupt person who is found or supposed to be a guilty of committing a bankruptcy offense. The BRO may be obtained for a period of 2 to 15 years and it largely depends upon the severity of the bankruptcy offence committed by the person. The BRO may have several far-reaching impacts on the bankrupt person. The person may be restricted from becoming a Director in any Company. He can’t obtain any credit above £500, unless he discloses his bankrupt status. The person can’t think of becoming an MP or hold such prestigious positions. This can also impact upon the professional competence of the person. Business or trades can also have severe negative impacts when a Bankruptcy Restriction Order is made against the name of a particular trade or business.

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