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Jo C.
Jo C., Barrister
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Experience:  Over 5 years in practice
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In 2008, I became bankrupt second time and was subject to

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In 2008, I became bankrupt for the second time and was subject to restrictions lasting 7 years.
I moved to live with a parent in the same year and soon after decided to apply for credit cards at my new address. I do not remember whether or not the credit applications contained a question regarding whether the applicant had been bankrupt in the past, but I suspect that there may have been on some or perhaps all of them. If so, I would have ticked "no", as I believed that the prior bankruptcy only needed to be declared if it was at the same address, and the restriction order referred to declaration if borrowing £500 or more - I did not consider at the time that this might include credit card facilities, and I still don't know if it does.
I have four credit cards, plus a bank loan which was taken out last year (after the bankruptcy restriction order would have ceased.)
I never intended to let my debts become unmanageable, but I have been out of work for 3 months and have arranged with creditors to pay a nominal amount for a few months, and this arrangement is ending shortly. My only income has been help from a relative and this cannot continue, so I am intending to file for bankruptcy once again. (Total debts are just over £20,000.) I do not want to arrange an I.V.A., even if I should find employment in the near future. I have no assets to be affected by bankruptcy and I want to put debt behind me completely and never to enter into it again.
My concern is that I may have unintentionally committed credit fraud by not declaring on my applications that I was under bankruptcy restrictions, even though I believed that I did not think that they applied, since I was not borrowing money like a loan. I don't know what the Official Receiver will ask me; whether they will have access to records of expired bankruptcy restrictions; what information I should volunteer, or how to respond when or if asked about whether I was previously bankrupt and these associated issues.
Are you able to determine whether or not the Receiver will have access to records of expired bankruptcies and restrictions orders? It they do not, perhaps the issue may be avoided if I do not volunteer information regarding a previous bankruptcy and restrictions order.
If they do have access to such records, then they may ask about my declarations when applying for credit, and I presume that my belief that I only needed to declare previous bankruptcy if I was living at the same address and that I believed the restrictions did not apply to credit card applications (if they do) will be no defence.
I am wondering what I should expect in the situation and what I should do and say. I suppose that this will be governed by what the Receiver has access to and whether the restriction order covers credit card applications. Also, whether I might be prosecuted and what to expect if this happens. No attempts at fraud were intended, but if convicted, what sort of sentence might I expect, or might I possibly receive a suspended sentence? A fine would not be appropriate as I would be unable to pay it.
If I have been in error and am found to be in contravention of my restriction order, I am prepared for some repercussions, but I would hope to be able to mitigate them in some way. I am extremely embarrassed and ashamed of myself for being in this position again and simply want to finally resolve it and keep myself out of trouble henceforth.
Your advice on the situation, expectations and how to proceed would be very much appreciated.
Submitted: 6 months ago.
Category: Law
Expert:  Nicola-mod replied 6 months ago.
Hello,
I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.
I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.
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Customer: replied 6 months ago.
please search for the best person to provide the answers. Thank you.
Expert:  Nicola-mod replied 6 months ago.
Hello,
We will continue to look for a Professional to assist you.
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Expert:  Alex J. replied 6 months ago.

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. Are you currently in correspondence with the OR? When were you formally discharged from your last bankruptcy? Kind regards AJ

Customer: replied 6 months ago.
Hi AJ, thanks for your message.I have not yet submitted an application for bankruptcy, so I'm not currently in touch with the OR. I can't find my records of my prior bankruptcy, but I believe that it was either late 2007 or early 2008. I don't think that I applied for a discharge certificate, but the bankruptcy period was 12 months, so the discharge would have been early 2009, with bankruptcy restrictions lasting until early 2015.I remembered something else of significance. I believe that I did not put a previous address on any application forms and may have put a longer residence period at my current address, to avoid any other address details. If this was the case, it was obviously a really stupid thing to do and I cannot imagine what I was thinking at the time. However, I presume it would almost certainly indicate that I was applying for credit with false information.As well as whether the OR has access to the expired bankruptcy and restrictions records, the other key question that become even more significant is whether my credit application forms would still be available and whether they would be checked by the OR and/or creditors.Thanks for your advice, in anticipation.Regards,Jay.
Expert:  Alex J. replied 6 months ago.

Hi, Thank you. Details of your previous bankruptcy will be available to the OR, whether the OR has the time or resources to investigate this any further is another matter. The credit applications themselves will only be available to the OR if they are provided by the bank concerned. When did you actually make the new credit applications? Kind regards AJ

Customer: replied 6 months ago.
The earliest statements that I can find are the beginning of 2012, so I believe that the applications were from late 2011 and 2012, with one in 2014.
Expert:  Alex J. replied 6 months ago.

Hi, Thank you. Do you have the exact wording of the bankruptcy restriction to hand?

Customer: replied 6 months ago.
I can look further, but may not have the original.It may well have been the same ass the wording on the website: https://www.gov.uk/government/publications/bankruptcy-restrictions-orders-and-undertakings/bankruptcy-restrictions-orders-and-undertakingsViz.:-BRO and BRU restrictions include the rules you have to keep to when you are made bankrupt and other extra rules. For example, you must not:act as a director of a company, or form, manage or promote a company, without permission from the court
carry on business under a different name without telling people you do business with the name (or trading style) in which you were made bankrupt
try to borrow more than £500 without saying you are subject to restrictions
be a trustee of a charity
work in various posts in education such as being a school governor
Expert:  Alex J. replied 6 months ago.

Thank you. Essentially the main issue here is that you did not disclose your bankruptcy, however your bankruptcy itself would have appeared in a credit check. As a starting point why dont you get all the information - go to your creditor banks and ask for "Subject Access" request - they will have to deliver to you all personal data they hold on you - as a result you will be able to find out if they still hold the forms and what you filled in. If they do not have the forms, they are unlikely to have the resources to pursue any kind of allegation of criminal behaviour. Do you currently have any assets? Kind regards AJ

Customer: replied 6 months ago.
Thank you, ***** ***** of contacting creditors to ask for copies of applications had just occurred to me, but your way is preferable.Further to previous messages, I cannot find the restrictions order. If the OR would be able to refer to it anyway in any future bankruptcy dealings, would it be advisable to contact them to request a copy to see whether the word "credit" is mentioned? I'm still unclear as to whether a credit card application, which is not to borrow a specific amount of money is governed by the wording of the restrictions otherwise.I have found a note of the date of bankruptcy as being on March 22nd, 2007, so the discharge would have actually been in 2008. Also, confirmation of one credit card application in October 2014 - this one may or may not be outside the period of restrictions, depending on whether they date from the start or end of the bankruptcy period.I have no assets or any barrier to bankruptcy, other than the issues under discussion.Regards,Jay.
Customer: replied 6 months ago.
Addendum to last message :-My bankruptcy may not have been apparent in a credit search, as there was no link to my previous address.
Expert:  Alex J. replied 6 months ago.

Hi, Your previous estate in bankruptcy has now passed, so in theory the OR should only look at those matters in your estate between your bankruptcy order and discharge and your new date of bankruptcy.

You could also do a subject access request to the Insolvency Service and find out what info they hold on you?

Customer: replied 6 months ago.
Even though my previous bankruptcy had expired, the problem remains that I took out credit agreements whilst under a bankruptcy restrictions order.I have enquired of my various creditors regarding obtaining subject access, and they are £10 each with a wait of up to 40 days. It was apparent that my original applications are still available, and since I am now convinced that I did not complete them correctly, I'm dubious that sending for them now will be useful.What I would really like to know is, if I do enter into bankruptcy once again and happen to face criminal proceedings for fraudulent (three or four) credit applications, what would be the best and worst outcomes that I might expect? This may be a significant factor in whether to proceed down this route or to try as far as possible to obtain an IVA.Thanks again, Jay.
Expert:  Alex J. replied 6 months ago.

Hi, Thank you. It really depends on various factors surrounding your obtaining of the credit. What lengths did you go to actually obtain this? Did you falsify your identity? Did you do this multiple times? Were ever rejected?

Customer: replied 6 months ago.
Hi AJ, I never falsified my identity. I did not declare my previous bankruptcy, the restriction order, or my previous address. I may have put the term of residency at my current address as more than 6 years to avoid detailing a previous address, so I presume that credit checks which were made were solely on my current address and so the applications were not rejected. These were for a bank account and three credit cards. If I go ahead with a bankruptcy petition, I would be grateful for an idea of the best defence position that I should adopt if prosecuted and the possible consequences if convicted. Thank you.
Customer: replied 6 months ago.
Please see my last message. Thanks.
Expert:  Alex J. replied 6 months ago.

Hi My apologies I have received this now. The best defence you will have is co operating and acknowledging the issue. Were you fully aware of the restrictions at the time, or did you just believe the restriction only applied to loans? In which you could have grounds to say this was not actually dishonest but just mistake on your part?

Customer: replied 5 months ago.
Hi Alex, I was thinking along the same lines myself. I still would like to be prepared for the worst case scenario, so please give me your estimation of the likely sentence/penalty that I could expect if found to guilty of deliberate fraud. (Multiple instances.) I have not finally decided what to do yet, and may seek an IVA, but I would still like to know the worst consequences of the bankruptcy route. Thanks, Jay.
Expert:  Alex J. replied 5 months ago.

Hi, Thank you Do you have any previous convictions? Kind regards AJ

Customer: replied 5 months ago.
No, no convictions.
Customer: replied 5 months ago.
Hi AJ, don't want to hassle you, but still waiting on your answer. Thanks.
Expert:  Alex J. replied 5 months ago.

My apologies. Without any previous convictions and the fact it is not dishonest means that I would think it is possible this may not investigated. That said if you were found guilty of a fraud offence prison is a possibility. Is £20k the max liability here?

Customer: replied 5 months ago.
Providing a false term of occupation at my present address would surely constitute dishonesty. I think that at least one debt of around £7,000 would not be in consideration, as it was a bank loan in the latter past of last year. Total debt is a little over £20,000, or around £14,000 without the loan. I would like to know your estimation of the likelihood of a prison sentence and the likely term. Thanks.
Expert:  Jo C. replied 5 months ago.

Hi. I have been asked to look at this as I am a criminal lawyer.

What is the fraud? Applying for credit in contravention of a bankruptcy order?

Customer: replied 5 months ago.
Hi Jo,Thank you for taking on my query.Due to current debts and lack of income, I am considering my options, including bankruptcy. I had a previous bankruptcy (March 2007-8) after which I moved to another address, living with a relative. I was subject to a 7 year bankruptcy restriction order. During that period, I applied for four credit cards. I also have a bank loan from late last year, which would have been outside the restricton period.I did not declare my previous bankruptcy on my applications, as I had it in mind that it related mainly to my previous address. I have only recently been reminded of the restriction order, and did not have it in mind when I made my applications. In trying to recall the wording of the restriction order, it may have stated that it should be declared if borrowing £500 or more, but I wonder at its relevance to credit cards, as they are credit facilities and not borrowing specific amounts.I had heard somewhere that applications should be made with the term of residency at a current address as 6 years or more to facilitate them. Obviously, this was an error which could be constituted as fraud, although it was not intended to be. Failure to declare the restriction order was a genuine oversight, but may be considered not to have been.In short, my applications probably contained errors and omissions which I am concerned may be considered to constitute fraud, although that was not my intention.If I go ahead with a bankruptcy petition, I do not know whether I would be asked about my original applications, or if these would be investigated. I would be grateful for advice on this, on the best defence position that I should adopt if prosecuted and the possible consequences if convicted. I have no previous convictions. (If relevant, I have no intention of using a credit card again or applying for credit in the future.)Thank you.
Customer: replied 5 months ago.
Hi Jo, did you see my reply above? Thanks.
Expert:  Jo C. replied 5 months ago.

No, I didn't so thanks for the reminder.

Are you repaying all the debts? Will they be unpaid if you declare yourself bankrupt?

Customer: replied 5 months ago.
Currently, the debts are on temporary informal low payments. I am securing some part-time work which may facilitate the more formal arrangement of an IVA. If this doesn't work out or there are other complications, then bankruptcy becomes a more serious option. In that event, the debts would indeed be unpaid. Given the history of my credit applications, I would like to be prepared and consider all possible consequences. Thanks.
Expert:  Jo C. replied 5 months ago.

There is a risk that could happen.

The reality is that if you secure credit by means of giving false information then that is a fraud. You can argue that it was a mistake which would mean there is no dishonesty but they may well not accept that.

They will rarely take any action though until a person stops paying the debt.

If a person declares bankruptcy then that would lead to a huge loss for the creditor and that would be a time that they are likely to start investigating.

They may not but you cannot hide from the risk.

Can I clarify anything for you?

Jo

Customer: replied 5 months ago.
I have acknowledged the risk here, but what I have been trying to do for weeks with this question is to quantify the risk. Sorry, but I keep asking, repeating myself regarding facts and figures and still not getting the answer. I would like an opinion on what the possible consequences might be, in terms of actual potential sentences if there was a prosecution. If you could let me have your informed opinion on that, I would appreciate it. Thanks.
Expert:  Jo C. replied 5 months ago.

I think they probably would report it. Nobody can say what they will do but clearly they would have a motive.

How much did you borrow?

Customer: replied 5 months ago.
Excluding my loan which was at the latter end of last year and so outside of these considerations, my other debts total around £15,000. Just some indications of possible sentences if prosecuted would be helpful. I know nothing is hard and fast or predictable with certainty, I would just like a framework of reference, because presently I have no idea. Thanks.
Expert:  Jo C. replied 5 months ago.

This is a very rough guideline obviously but it is going to fall into category four of the sentencing guidelines and probably culpability B. That would mean the starting point is 26 weeks and the range is a community order to a custodial sentence of one year.

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