Insolvency Act 1985

CHAPTER VII Bankruptcy Offences

183 Preliminary

(1) Subject to section 189(3) below, this Chapter applies where the court has made a bankruptcy order on a bankruptcy petition.

(2) This Chapter applies whether or not the bankruptcy is annulled, but proceedings for an offence under this Chapter shall not be instituted after the annulment.

(3) Without prejudice to his liability in respect of a subsequent bankruptcy, the bankrupt shall not be guilty of an offence under this Chapter in respect of anything done after his discharge ; but nothing in this Part shall prevent the institution of proceedings against a discharged bankrupt for an offence committed before his discharge.

(4) A person shall not be guilty of an offence under section 184(1), (2) or (3), 185(1), (2) or (3), 186(1), 187(1) or (2) or 188 (1) below if he proves that, at the time of the conduct constituting the offence, he had no intent to defraud or to conceal the state of his affairs.

(5) It shall not be a defence in proceedings for an offence under this Chapter that anything relied on, in whole or in part, as constituting that offence was done outside England and Wales.

(6) Proceedings for an offence under this Chapter or under the rules shall not be instituted except by the Secretary of State or by or with the consent of the Director of Public Prosecutions.

184 Failure to hand over property etc.

(1) The bankrupt shall be guilty of an offence if—

(a) he does not to the best of his knowledge and belief disclose all the property comprised in his estate to the official receiver or the trustee of that estate; or

(b) he does not inform the official receiver or that trustee of any disposal of any property which but for the disposal would be so comprised, stating how, when, to whom and for what consideration the property was disposed of;

but paragraph (b) above shall not apply to any disposal in the ordinary course of a business carried on by the bankrupt or to any payment of the ordinary expenses of the bankrupt or his family.

(2) The bankrupt shall be guilty of an offence if—

(a) he does not deliver up possession to the official receiver or trustee, or as the official receiver or trustee may direct, of such part of the property comprised in his estate as is in his possession or under his control and possession of which he is required by law so to deliver up;

(b) he conceals any debt due to or from him or conceals any property the value of which is not less than the prescribed amount and possession of which he is required to deliver up to the official receiver or trustee; or

(c) in the period of twelve months ending with the presentation of the petition or between the presentation of the petition and the commencement of the bankruptcy, he did anything which would have been an offence under paragraph (b) above if the order had been made immediately before he did it.

(3) The bankrupt shall be guilty of an offence if he removes, or between the presentation of the petition and the commencement of the bankruptcy removed, any property the value of which was not less than the prescribed amount and possession of which he has or would have been required to deliver up to the official receiver or the trustee of his estate.

(4) The bankrupt shall be guilty of an offence if he without reasonable excuse fails, on being required to do so by the official receiver or by the court—

(a) to account for the loss of any substantial part of his property incurred in the period of twelve months ending with the presentation of the petition or between the presentation of the petition and the commencement of the bankruptcy; or

(b) to give a satisfactory explanation of the manner in which such a loss was incurred.

(5) References in this section to property comprised in the bankrupt's estate or to property possession of which is required to be delivered up to the official receiver or the trustee of a bankrupt's estate include references to any property which would be such property if a notice in respect of it were given under section 154 or 155 above.

185 Concealment etc. of books and papers

(1) The bankrupt shall be guilty of an offence if he does not deliver up possession to the official receiver or the trustee of his estate, or as the official receiver or trustee may direct, of all books, papers and other records of which he has possession or control and which relate to his estate or affairs.

(2) The bankrupt shall be guilty of an offence if—

(a) he prevents, or between the presentation of the petition and the commencement of the bankruptcy prevented, the production of any books, papers or records relating to his estate or affairs ;

(b) he conceals, destroys, mutilates or falsifies, or causes or permits the concealment, destruction, mutilation or falsification of, any books, papers or other records relating to his estate or affairs ;

(c) he makes, or causes or permits the making of, any false entries in any book, document or record relating to his estate or affairs; or

(d) in the period of twelve months ending with the presentation of the petition or between the presentation of the petition and the making of the bankruptcy order, he did anything which would have been an offence under paragraph (b) or (c) above if the order had been made before he did it.

(3) The bankrupt shall be guilty of an offence if—

(a) he disposes of, alters or makes any omission in, or causes or permits the disposal, altering or making of any omission in, any book, document or record relating to his estate or affairs ; or

(b) in the period of twelve months ending with the presentation of the petition or between the presentation of the petition and the commencement of the bankruptcy, he did anything which would have been an offence under paragraph (a) above if the order had been made before he did it.

186 False statements

(1) The bankrupt shall be guilty of an offence if he makes or has made any material omission in any statement made under this Part and relating to his affairs.

(2) The bankrupt shall be guilty of an offence if—

(a) knowing or believing that a false debt has been proved by any person under the bankruptcy, he fails to inform the trustee of his estate as soon as practicable; or

(b) he attempts to account for any part of his property by fictitious losses or expenses; or

(c) at any meeting of his creditors in the period of twelve months ending with the presentation of the petition or (whether or not at such a meeting) at any time between the presentation of the petition and the commencement of the bankruptcy, he did anything which would have been an offence under paragraph (b) above if the order had been made before he did it; or

(d) he is, or has at any time been, guilty of any false representation or other fraud for the purpose of obtaining the consent of his creditors, or any of them, to an agreement with reference to his affairs or to his bankruptcy.

187 Fraudulent disposal etc. of property

(1) The bankrupt shall be guilty of an offence if—

(a) he makes or causes to be made, or has in the period of five years ending with the commencement of the bankruptcy made or caused to be made, any gift or transfer of, or any charge on, his property ; or

(b) he conceals or removes, or has at any time before the commencement of the bankruptcy concealed or removed, any part of his property after, or within two months before, the date on which a judgment or order for the payment of money has been obtained against him, being a judgment or order which was not satisfied before the commencement of the bankruptcy.

(2) The bankrupt shall be guilty of an offence if—

(a) he leaves, or attempts or makes preparations to leave, England and Wales with any property the value of which is not less than the prescribed amount and possession of which he is required to deliver up to the official receiver or the trustee of his estate ; or

(b) in the period of six months ending with the presentation of the petition or between the presentation of the petition and the commencement of the bankruptcy, he did anything which would have been an offence under paragraph (a) above if the order had been made immediately before he did it.

(3) In this section—

(a) references to property possession of which is required to be delivered up to the official receiver or the trustee of a bankrupt's estate include references to any property which would be such property if a notice in respect of it were given under section 154 or 155 above; and

(b) references to making a transfer of or charge on any property include references to causing or conniving at the levying of any execution against that property.

188 Fraudulent dealing with property obtained on credit

(1) The bankrupt shall be guilty of an offence if, in the period of twelve months ending with the presentation of the petition or between the presentation of the petition and the commencement of the bankruptcy, he disposed of any property which he had obtained on credit and, at the time he disposed of it, had not paid for.

(2) A person shall be guilty of an offence if, in the period of twelve months ending with the presentation of the petition or between the presentation of the petition and the commencement of the bankruptcy, he acquired or received property from the bankrupt knowing or believing—

(a) that the bankrupt owed money in respect of the property ; and

(b) that the bankrupt did not intend, or was unlikely to be able, to pay the money he so owed.

(3) A person shall not be guilty of an offence under subsection (1) or (2) above if the disposal, acquisition or receipt of the property was in the ordinary course of a business carried on by the bankrupt at the time of the disposal, acquisition or receipt.

(4) In determining for the purposes of this section whether any property is disposed of, acquired or received in the ordinary course of a business carried on by the bankrupt, regard may be had, in particular, to the price paid for the property.

(5) In this section references to disposing of property include references to pawning or pledging it, and references to acquiring or receiving property shall be construed accordingly.

189 Obtaining credit

(1) The bankrupt shall be guilty of an offence if—

(a) either alone or jointly with another person, he obtains credit to the extent of the prescribed amount or more without giving the person from whom he obtains it the relevant information about his status ; or

(b) he engages (whether directly or indirectly) in any business under a name other than that in which he was adjudged bankrupt without disclosing to all persons with whom he enters into any business transaction the name in which he was so adjudged.

(2) The reference in subsection (1) above to the bankrupt obtaining credit includes a reference to—

(a) a case where goods are bailed to him under a hire purchase agreement or agreed to be sold to him under a conditional sale agreement; and

(b) a case where he is paid in advance (whether in money or otherwise) for the supply of goods or services.

(3) A person whose estate has been sequestrated in Scotland or who has been adjudged bankrupt in Northern Ireland shall be guilty of an offence if, before his discharge, he does anything in England and Wales which would be an offence under subsection (1) above if he were an undischarged bankrupt and the sequestration of his estate or the adjudication in Northern Ireland were an adjudication under this Part.

(4) For the purposes of subsection (1)(a) above the relevant information about the status of the person in question is the information that he is an undischarged bankrupt or, as the case may be, that his estate has been sequestrated in Scotland and that he has not been discharged.

190 Failure to keep proper accounts of business

(1) Where the bankrupt has been engaged in any business for any of the period of two years ending with the presentation of the petition, he shall be guilty of an offence if he has not kept proper accounting records throughout that period and throughout any further period in which he was so engaged between the presentation of the petition and the commencement of the bankruptcy, or has not preserved all the accounting records which he has kept.

(2) The bankrupt shall not be guilty of an offence under subsection (1) above—

(a) if his unsecured liabilities at the commencement of the bankruptcy did not exceed the prescribed amount; or

(b) if he proves that in the circumstances in which he carried on business the omission was honest and excusable.

(3) For the purposes of this section a person shall be deemed not to have kept proper accounting records if he has not kept such records as are necessary to show or explain his transactions and financial position in his business, including—

(a) records containing entries from day to day, in sufficient detail, of all cash received and paid ;

(b) where the business involved dealings in goods, statements of annual stock-takings ; and

(c) except in the case of goods sold by way of retail trade to the actual customer, records of all goods sold and purchased showing the buyers and sellers in sufficient detail to enable the goods and the buyers and sellers to be identified.

(4) In relation to any such records as are mentioned in subsection (3) above, section 185(2)(d) and (3)(b) above shall have effect with the substitution for any reference to twelve months of a reference to two years.

191 Gambling

(1) The bankrupt shall be guilty of an offence if he has—

(a) in the period of two years ending with the presentation of the petition, materially contributed to, or increased the extent of, his insolvency by gambling or by rash and hazardous speculations ; or

(b) between the presentation of the petition and the commencement of the bankruptcy, lost any part of his property by gambling or by rash and hazardous speculations.

(2) In determining for the purposes of this section whether any speculations were rash and hazardous, the financial position of the bankrupt at the time when he entered into them shall be taken into consideration.

192 Penalties

(1) A person guilty of an offence under section 184(1), (2) or (3), 185(1), (2) or (3), 186(1) or (2) or 188(1) or (2) above shall be liable—

(a) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both ;

(b) on conviction on indictment, to imprisonment for a term not exceeding seven years or to a fine or to both.

(2) A person guilty of an offence under section 184(4), 187(1) or (2), 189(1) or (3), 190(1) or 191 above shall be liable—

(a) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.