Business Personal Finance

Wednesday 23 October 2019

More than 200 bankrupts probed over suspicions they are hiding their assets

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Charlie Weston

Charlie Weston

The State's Insolvency Service is probing hundreds of cases where people who have declared themselves bankrupt are suspected of hiding assets.

Some are trying to keep cars and properties out of the hands of the bankruptcy officials and their creditors, with others suspected of illegally transferring assets to relations before opting for bankruptcy.

The Insolvency Service of Ireland has disclosed it is investigating 210 cases.

Hidden assets worth €3.8m were recovered in one instance, according to the 2018 annual report of the Insolvency Service of Ireland.

Bankrupts were trying to keep bank accounts, buy-to-let properties, cars and rental income secret.

A number of those seeking to sort out their debt situation had attempted to give their assets to a relative prior to bankruptcy, something which is illegal.

Earlier this month, a US jury awarded €18m to bankrupt developer Sean Dunne's bankruptcy trustee after finding against him and his wife Gayle Killilea over the unlawful transfer of some assets to put them beyond the reach of creditors.

The Irish Insolvency Service was involved in that case.

Its annual report says that a new enforcement and compliance team was set up last August.

A crackdown on dishonest bankrupts led the Insolvency Service of Ireland to take 19 cases back to the High Court over what it said was non-­cooperation.

The sanctions imposed were extension orders making the bankruptcy term longer. Bankruptcy terms were extended for between 10 months and close to 12 years.

One year is the normal bankruptcy term.

The Insolvency Service (ISI) said bankruptcy was a process that delivered debt relief to bankrupts while transferring all their assets to the official assignee.

"The integrity of the system depends on bankrupts making full disclosure and co-operating with the official assignee. The bankruptcy division of the ISI will continue its policy to vigorously pursue the recovery of assets not declared," interim CEO Chris Lehane said in the report.

Last year a total of 397 people were adjudged bankrupt, with 461 people leaving bankruptcy.

The number of bankruptcies last year was down 76 on the figures for 2017.

Most of the people declared bankrupt last year had petitioned the High Court themselves.

In a small number of cases creditors petitioned the court in an attempt to get some of the money they are owed.

Just over €11bn in assets was realised by the official assignee from the bankruptcy process last year.

The annual report shows that 120 family homes were transferred back into the ownership of former bankrupts.

But the official assignee took action to sell 17 family homes in 2018.

Ten of these saw the bankrupt or the spouse make a settlement to retain the home.

There were no forced sale applications last year.

The Insolvency Service was set up in March 2013 as banks were dealing with record levels of defaults after the crash.

The Personal Insolvency Act 2013 reduced the bankruptcy term from 12 years to three. The period was cut to one year in 2016.

Irish Independent

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