Bankrupt sentenced for fraudulently transferring assets

Year Published: 2013

The Insolvency Service has recently published details of a bankrupt, who was sentenced to six months in prison by Cardiff County Court, for fraudulently transferring assets prior to the making of the bankruptcy order.

An investigation into the bankrupt’s affairs identified that one month prior to the making of the bankruptcy order, the bankrupt and his wife sold their property to their children with a gifted deposit of £41,955.

The seriousness of the bankrupt’s conduct was expressed in the judgment of His Honour Judge Stephen Hopkins WC who stated that not only was a custodial sentence ”the only sentence to reflect the gravity of the offence”, but that an order for costs would also have been made had the bankrupt’s financial position allowed the same.

Liam Mannall, the Deputy Chief Investigation Officer with the Department for Business, Innovation and Skills said that “The Department for Business, Innovation and Skills will investigate and prosecute individuals who embark on such conduct and place them before the criminal courts.“

Further details of the facts in this case can be found on the Insolvency Service website.

This case is a useful reminder to professional advisers, insolvency practitioners and individuals experiencing financial pressure of the potential sanctions for unlawful dispositions of property by a bankrupt. These sanctions include criminal sanctions, as well as the more commonly used powers to set aside such transactions and recover funds for the benefit of a bankrupt’s creditors.

If you are under financial pressure or require further information on personal insolvency matters, please contact our Dispute Resolution team on 0161 475 7676 or email [email protected].

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