Reports show that the Insolvency Service is clamping down on individuals who seek to deliberately dispose of their assets in order to avoid repaying creditors. Unfortunately, as Insolvency Practitioners who act as Trustee in Bankruptcy cases and Liquidator of Corporate cases, this is something we see far too often.
Independent research has identified a 24 percent rise in the number of bankruptcy restriction orders (BROs) issued by the Insolvency Service during the year ending March 2017. This being to crack down on the ‘dissipation of assets’.
‘Dissipation of assets’ is when an individual is considered to have unreasonably disposed of assets without regard to repaying their creditors, such as banks and credit card companies.
An example might be where the individual has chosen to spend a sum of money received from the sale of an asset, such as a car, on a holiday, rather than paying back the debt they already owe.
Source: Insolvency News online