In December 2008 a Freezing Injunction was made against my assets. This was in respect of a Fraud I had committed against my former employer to the value of £191,000. In November 2009, I pleaded guilty to the offence and received a two year custodial sentence.In July 2011 they obtained a High Court judgement for the sum of £280,000, by consent, in respect of the fraud and damages. The freezing order was continued.They have now applied for a Charging Order over the matrimonial home, due to be heard next month.I have other unsecured debts in the region of £30,000 and a beneficial interest in the matrimonial home of approx. £28,000.My intention is to present a Bankruptcy petition, prior to the hearing for the for above-mentioned charging order. I am concerned that debts emanating from fraud remain after discharge from Bankruptcy, Insolvency Act 1986 281(3).1) Is it still worthwhile going bankrupt in view of the above paragraph?2) If my assets are removed by the bankruptcy process, what is the relevance/effect of the "Fraud Debt" remaining?3) What alternatives are available/recommended? (I have offered a lump sum settlement equivalent to my beneficial interest in the property, but this has been rejected.) 4) Would Bankruptcy remove the Freezing Order?5) Would Bankruptcy halt the Charging Order from being made final?Many thanks.
Province/Country relating to question : Engalnd
1. At the outset, going into bankruptcy will not lead to the release of the Freezing Order. They are two separate processes and one does not affect the other. in order to obtain the release of the Mareva/Freezing Order, you will have to make application to the court which made the order. Secondly, the making of a Bankruptcy Order will not halt the Charging Order, in the circumstances, as the Charging Order is being sought in respect of a debt which arose by reason of fraud and as such is not affected by the making of a Bankruptcy Order. Accordingly, the Charging Order against the matrimonial home will go ahead regardless of whether you seek a bankruptcy order or not.
2. If you go bankrupt, the effect will be that you will get a discharge from all debts apart from those which arose as a result of the fraud. Accordingly, the answer to your question as to whether it is still worthwhile going bankrupt really depends upon whether your other debts are so significant that it is worth your while. Be aware that the "fraud" creditor will seek to appropriate all your assets to their debt, regardless of bankruptcy as they are not inhibited in charging or appropriating your assets by you going bankrupt. It really means that your other creditors will get nothing. Finally, the upshot of the "fraud debt" remaining after your bankruptcy will mean that there will be no "starting again" for you once the bankruptcy is over. This debt will still remain and you can still have an instalment order made against any income you might generate. Accordingly, I would advise you to seek to reach some agreement as regards the "fraud debt" before you consider going bankrupt, as you may end up in the worst of both worlds - without assets and with a big debt still hanging over you and any money you might make.
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Barrister 17 years experience
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