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Prison for Lying Pensioner Who Abused the Bankruptcy Process

Bankruptcy provides an opportunity for debtors to put their finances back on an even keel and to get on with their lives. However, as one High Court case showed, those who hide their assets or otherwise fail to cooperate with the insolvency process can face severe punishment, including loss of liberty.

The case concerned a man in his 80s who had inherited almost £280,000 from an elderly widow. However, a judge subsequently ruled her will invalid on the basis that she had lacked the mental capacity to make it. The man was ordered to repay the money into the woman’s estate and was declared bankrupt after failing to do so.

His trustee in bankruptcy applied to have him committed to prison on the basis that he had committed numerous breaches of the Insolvency Act 1986. In upholding the trustee’s arguments, the Court found that he had lied, including under oath, about the whereabouts of the money. He had failed to answer the trustee’s legitimate questions or to comply with court orders requiring him to provide information.

Amongst other things, he falsely claimed to have spent the money on around-the-world cruises and gambling. There was evidence that large sums had been moved between various bank accounts and his claim that the money had been in the boot of a car when it was removed by bailiffs was rejected. He received a 12-month prison sentence after being found guilty of serious contempt of court.

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