Tactical Bankruptcy – Don’t keep secrets from the Official Receiver!
Having declared himself Bankrupt on 29 February 2012, the individual involved would usually have been released from the Bankruptcy restrictions a year later on 28 February 2013.
Instead, following an investigation by the Insolvency Service, it transpires that the individual failed to disclose a number of assets to the Official Receiver and has accordingly been forced to give a “Bankruptcy Restrictions Undertaking” for 9 years – until 2022!
In addition, the individual cannot manage or control a company during this period without leave of the Court.
The Official Receiver’s investigation concluded that the individual ought to have known that he had a duty to reveal the assets in question to his Trustee, the Official Receiver, and therefore failed in his disclosure obligation.
It is not uncommon for individuals to tactically declare themselves Bankrupt to avoid circling creditors. This case serves as a reminder that, if you do so, you need to be prepared to face the consequences and bare all to the Trustee in Bankruptcy (in this case the Official Receiver).