False insurance claim sees bankruptcy extended eight years

A Warwickshire man has had his bankruptcy extended for eight years for making a false insurance claim.

The ban follows an investigation by the Insolvency Service, which found that Mohammed Shahjahan made a false insurance claim in which he declared that he had been injured in a road traffic accident in November 2011.

The undertaking means Mr Shahjahan, 40, of Atherstone, will be bound for eight years and will not be discharged from bankruptcy until 2024. In addition, he cannot manage or control a company during this period without leave of the court.

In July 2014, a court ruled that the insurance claim was false and Mr Shahjahan was ordered to pay third party costs. A counter-claim was made by the insurance company and in September 2015, Mr Shahjahan was ordered by the court to pay damages and further costs.

He failed to pay the interim payment, causing the insurance company to petition for his bankruptcy. A bankruptcy order was made against him in January 2016.

The total liability to the insurance company is £51,870, which materially contributed to Mr Shahjahan’s deficiency in bankruptcy.

If the Official Receiver considers that the conduct of a bankrupt has been dishonest in some way, they will report the facts to court and ask for a Bankruptcy Restrictions Order (BRO) to be made. The court will consider this report and any other evidence put before it, and will decide whether it should make a BRO. If it does, the bankrupt will be subject to certain restrictions for the period stated in the order. This can be anywhere from two to 15 years.

Commenting on the case, Kevin Read, Official Reciever, at the Insolvency Services said: “The Insolvency Service always looks very closely at individuals who demonstrate dishonesty and takes action where wrongdoing is uncovered.”