When you go bankrupt you have to stick to the deal, here is why…

We have mentioned before how bankruptcy has some serious downsides, in a recent blog post we covered one case in particular which was back in the press again.

The alleged non-compliance issue regarding Paul Codd resulted in an arrest warrant which could have lead to a risk of further prison time but he now says he was coerced into giving his undertaking to avoid this because it could have resulted in him being there over Christmas.

His bankruptcy came about due to failure to satisfy a judgement in 2011 for more than a half a million euro. Mr. codd alleges that the police came and knocked down his door with a battering ram and it left his children traumatised.

His total estimated debts are thought to be close to €5m. What this story does is bring into focus some of the downsides of bankruptcy, in particular that of non-compliance, you simply can’t get around the decisions made by the Official Assignee.

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What happens when you don’t comply?

An important aspect of bankruptcy is how the person deals with the Official Assignees requirements – your compliance makes a big difference. While a person can decide not to play ball, there are consequences to this.

One such example is Paul Codd the former Wexford hurler who spent a weekend in jail for failure to comply with orders surrounding his bankruptcy. His case focused on the failure to comply with an order to return leased machinery and he only avoided more prison time by promising to comply.

So when you are getting your advice (and we always advise going to professionals with relevant qualifications even if it isn’t us) remember that you are not getting a ‘get out of jail free’ card, in fact, messing about with your bankruptcy process will get you jail time in some circumstances as this case showed.

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