Request Call

Speak to a specialist adviser today
for a no-obligation chat.
First Name
Last Name
Phone Number
Are You Curently Bankrupt

Latest Headlines

Need quick advice?

Ask an expert now and get an answer within the hour. Easy and FREE

Searching for information?

Visit our FREE archives and find the answer to thousands of questions.

Monday, 19 December 2011 07:14

What Is Bankruptcy Fraud?

Written by  Jon
Rate this item
(0 votes)
I am considering going bankrupt but dont want to lose a property I have so I am going to sell it to my friend for a less then what it is worth  can I get in trouble for this?

Answer:  I am thinking you already know the answer to this.  If it feels wrong, then it probably is wrong.  And yes, this is wrong.


This article may help explain this a bit more for you:


Is Transferring a Property Before Going Bankrupt Seen As Fraud?

What is bankruptcy fraud?

Is not disclosing an asset fraud?

Fraud - trying to hide or transfer an asset prior to going bankrupt, not being truthful or fully disclosing all details, intentional deception made for personal gain

Interesting definition and quite broad I might add.

So what about selling or transferring a property or asset prior to going bankrupt so that you  can either keep the asset or keep/hide the proceeds from the sale.

Obviously if it feels icky then it is icky; if it feels wrong, then it probably is wrong.

My advice always has been, and always will be: it is not wise to sell or transfer an asset prior to going bankrupt.

The bankruptcy forms themselves ask about any transfers or sales or property for the prior few years, so this does need to be disclosed, if you have sold or transferred property and do not disclose it, then it is as simple as lying.

Also, just because the bankruptcy forms ask about a few years back, the Official Receiver in a bankruptcy can look back even further if the need be.

And what if you have done this, what can the Receiver do, what’s the worst that can happen??

The Receiver could issue a BRO or bankruptcy restriction order against you, keeping you under the restrictions of bankruptcy longer than the usual 12 months and for up to 15 years!

They also have the authority to reverse the sale or transaction, meaning they can contact who you sold or transferred the property to and attempt to get it back or the cash equivalent of the value of the property.

It can get ugly then, bringing others into your bankruptcy.

I have heard of people not just giving a property to a family member to sort of hide it, but in some instances selling a property and using the proceeds to pay back a debt to a friend or family member; which is in essence preferring that person over their other creditors.

When this is found out, and you would be surprised how these things are uncovered, the Receiver asked the family member who had been paid for that money back.

When they family member stated they could not pay the money back, the Receiver then chased them for the money.  I was never updated as to the outcome from this, but ultimately the Receiver could have made that family member bankrupt to get the funds back.  And since the family member did own their own home, it could have been lost if they were made bankrupt.

So it gets not only ugly but complicated as well.

Some people in their querying this with me ask about being charged criminally due to misrepresenting something or committing fraud in their bankruptcy:  I have not heard of anyone being charged criminally due to doing this, but that does not mean it has not happened.  I suppose it would depend on the extent of things and what all had ben done.

Still, why even get mixed up on something like this if you don’t have to, and you don’t have to.

One person who I had spoken with years ago had mentioned they had transferred a car over to their son prior to going bankrupt.

The Receiver took note of this and issued the person with a BRO for eight (8) years.

Seemed like an odd amount of time, eight years, and also a bit harsh, but then again, I may not have been told all the details of the transfer.

So I suppose the word here from all this is to not transfer or sell assets prior to going bankrupt, and if you do make the decision to do this, be aware of the ramifications of such a move.

Is not disclosing an asset or not answering all the questions asked in bankruptcy fraud, yep, it is.

And again, why even begin to think about or do this.

If you have assets that you need to protect you may want to look at other options besides going bankrupt, possibly a Debt Management Plan or an IVA.  While they may take you a little bit longer to be debt free, at least you are not committing fraud and all the implications of doing so.

Ans one question I do get asked a lot is, how will they find out???  First, who is they??  The courts, the Receiver, etc.

In being less than truthful in your bankruptcy there are a variety of ways this may be discovered.  It may be through the requesting of documents to prove an expense or something you have written down on your bankruptcy forms; if you cannot show this, it can cause the Official Receiver to look even deeper into your bankruptcy and situation.

There are also land records, records through the DVLA, etc; paper trails can be found.

So I guess the best advice would be to be as truthful and honest as you can in completing the bankrutpcy forms and discussions with the OR.


I hope this has answered your question.

For more information and assistance, please complete our eligibility form at our web site or ring us at 0800 0029951.



Comments (0)Add Comment

Write comment
You must be logged in to post a comment. Please register if you do not have an account yet.


Insolvency calculator

Find out the best debt solution for you with our simple calculator:

Total Debt:


No of creditors:


Monthly income:


Monthly expenses:


Own home?

Yes No

Recent Activity

AlexisPittman One more thing you will discover throughout a lot of the opinions will be that folks carry on and employ Yacon prolonged as soon as they have reached their goal fat due to the a great many other gains. Read Homepage This specific is one of the handful of diet regime merchandise now available which can help service wellness simply by regulatory blood glucose levels and as
1 hour ago
BoydCruz Serum is an advanced anti-aging formula which helps in diminishing the appearance of your wrinkles, Click This Site fine lines, pigmentation of nay other aging sign. Its a composition of natural ingredients and is highly effective!
3 hours ago
Thencent19 created a new topic I'm this particular problem for beauty in the forums.
3 hours ago

Our Services

If you have a serious debt problem, bankruptcy can free you from your debts within 12 months. As a solution for dealing with serious debt, bankruptcy is a last resort. Other debt solutions need to be explored first, to help determine if bankruptcy is the right debt solution for you.


Your financial affairs are put into the hands of an Official Receiver or Trustee, who will control all your assets - and if you own a property, this will also be included. These will be sold and the money used to pay as much as possible to your creditors.


There are consequences to bankruptcy which will affect your finances and work life. You may struggle to borrow money, for example, and will not be able to apply for certain jobs.


For some, bankruptcy is the right option and will put an end to pressure from creditors. Our team of experts are on hand to advise on the best solution to your debt problems - call now on 0800 002 9951.


Browse Categories