What is the Purpose of Bankruptcy?

This post, I’m going to continue looking at Bankruptcy Fraud.

“Bankruptcy is in place to give people that relief from unmanageable debt,” said Jeff Hanley, ITSA’s national manager of fraud investigation.

To ensure that Bankruptcy is viewed as a legitimate option for people who are insolvent, it’s important to prosecute those who try to use bankruptcy to defraud their creditors.

“When it comes to the people that (sic) commit offences, in many instances they’re just the people who are trying to exploit the legislation.” Mr Hanley said.

If you genuinely can’t afford your debts, you have nothing to worry about with bankruptcy. Just to prove my point here are a couple of example of cases ITSA (Insolvency Trustee Services Australia) has prosecuted:

8 Time Bankrupt Convicted of Fraud, 11 August 2009

Bankrupt Hides $201,000 From Creditors,  8 December 2009

Bankrupt Owes Creditors Sells House and Gambles the Proceeds ($88,000)