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Do I get a Criminal Record if I become Bankrupt?

IVA insolvency practitioners and other debt advisors are always asked whether or not a person will get a criminal record if they file for bankruptcy. The answer is no. You do not get a criminal record for having difficulty paying your bills and doing something about it, such as a debt management plan, an IVA, or filing for bankruptcy to have your debts discharged. However if you do not pay your debts at all or try to find some way to get your debts managed, you could find yourself in trouble with the law, but threats of jail time are exactly that, just a threat.

It is extremely rare that people with serious debt or any debt at all will be convicted for not paying it. Jail is really a court’s last resort and unless you are convicted of fraud, not paying fines from the magistrate’s court, not paying your council taxes or business rates, or not keeping up your child support or alimony, you are unlikely to go to jail. Courts usually only send people to jail when they won’t pay off their debts as compared to people who are not able to pay the debts for lack of income, illness, or other valid reason. In other words, if you deliberately refuse to pay your bills, you could go to jail. This is not the case for most people.

So that you understand, you cannot be sent to prison or get a criminal record for the following reasons:
  • Non payment of debts that include credit cards, bank loans, and council taxes.

  • Non payment of council tax if a settlement is negotiated. Most councils do not like to take people to court and are willing to work with you to get your debt to something you can afford.

  • Going bankrupt unless the bankruptcy is called a ‘criminal bankruptcy’ due to things like gambling and overspending.

Usually you are facing jail time or an arrest if you have not paid some form of court ordered payment, such as child care and alimony or the others as listed above. More often then not the courts will make a ‘suspended committal order’ which means that you will need to pay an amount to the courts that has been set by the magistrate each week or month to pay the debt. If you fail to pay the debt, then a warrant will be sworn out for your arrest and you will be brought before the magistrate for another hearing.

If for any reason you get called into court regarding a fine or debt like council taxes, you have the right to bring a solicitor with you to speak on your behalf or ask for one to be assigned to you if you cannot pay for your own. A solicitor speaking on your behalf may actually be able to make a case for you to have all of or part of the debt you are in court for written off.

The biggest reason for you to go to court for when it comes to your debt is if it was incurred using fraudulent methods, such as applying for credit with no intention of repaying it, fraudulently applying for state benefits, etc. If you are falsely accused of fraud, it is advised that you seek a criminal law solicitor right away as the accusation could be considered harassment by a creditor and it comes with stiff penalties for them.
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