Those threatened with bankruptcy sadly often given in to the temptation of divesting themselves of their assets in order to cheat their creditors. However, as one Court of Appeal case showed, such behaviour is criminal and those involved can be both imprisoned and hit hard in the pocket.
The case concerned a thoroughly dishonest restaurant owner. When well aware of his parlous financial position, he transferred six properties into the names of his wife and ex-wife. After he was declared bankrupt, he continued to take credit for goods and services and ran up substantial further debts.
He was ultimately jailed for three years for six offences of transferring property before the commencement of bankruptcy and six of fraud. He was alleged to have profited from his crimes to the tune of over £500,000.
Following confiscation proceedings, he was found to have hidden assets and was ordered to pay £89,921. That sum, representing the entirety of his available assets, included almost £70,000 that had been transferred out of the country. In challenging that order, he argued that that money belonged to other members of his family and had been used to pay for his elderly mother's care.
In refusing to grant him permission to appeal, however, the Court noted that he had presented no documentary evidence to support those claims at the confiscation hearing. He had had every opportunity to prepare his case following his release from prison and such evidence as he had since produced was presented years late and was far from persuasive.