One issue encountered by collectors and trustees in chapter is using a number of aliases by a bankrupt. Whether or not it’s an harmless use of a nickname or an try to hide one’s id, using an alias can typically create issues for collectors looking for to pursue money owed and for trustees looking for to get well belongings held by a bankrupt.
How does it occur?
A typical state of affairs is when a debtor provides a nick title, or a false title, to a creditor throughout the course of a selected transaction. This may end up in subsequent authorized proceedings being commenced and judgment being entered within the incorrect title.
What legal guidelines are in place to forestall this?
- Part 80 of the Chapter Act 1966 requires a bankrupt to instantly notify the trustee of any change in title or change in deal with. This may apply whether or not it’s a authorized change of title or whether or not the bankrupt merely assumes using a distinct title. A failure to adjust to this requirement is a strict legal responsibility offence and may end up in a penalty of imprisonment for as much as 6 months.
- Regulation 13.03 of the Chapter Laws 1966 requires the Nationwide Private Insolvency Index (NPII) to file any alias utilized by a bankrupt, if identified. The NPII is the official register the place particulars pertaining to all bankruptcies are recorded. The NPII is offered to the general public.
What measures might be put in place to forestall this?
- Collectors ought to perform due diligence and investigations to make sure that contractual paperwork mirror the authorized names of the people which can be a celebration to it. Identification paperwork similar to a driver’s licence or passport, along with any change of title certificates, needs to be requested and punctiliously thought of previous to getting into into any agreements. This may make sure that subsequent authorized proceedings are introduced within the right title and subsequent judgments are efficient.
- Collectors ought to listing all identified aliases in any authorized proceedings or creditor’s petition and supply all identified aliases to the trustee in chapter. It’s permissible to call a defendant as, for instance, “Robert Smith (aka Rob Smith)” if that significantly particular person has both legally modified his title or has assumed using “Rob” in contractual or authorized paperwork and correspondence.
- Use of publicly out there databases to look authorized names, aliases and enterprise names earlier than and through authorized proceedings, such because the NPII, Federal Legislation Search, ABN Lookup and ASIC searches.
There are numerous authorities which have thought of using aliases by bankrupts, together with:
- Van Haltren v R  NSWCCA 274 – Use of a number of false names by an undischarged bankrupt to open financial institution accounts, get hold of credit score with out informing lenders of the chapter and creating false id paperwork. The bankrupt was sentenced to imprisonment for six years for all the offences mixed.
- Official Trustee in Chapter (as trustee of the bankrupt property of Williams) v Williams (aka Di-Pietro)  FCA – A property was held within the title of one of many bankrupt’s aliases. Compelling proof was introduced to the Courtroom that the bankrupt and the named alias had been the identical individual. A declaration was made by the Courtroom that any property held within the alias title would additionally vest with the trustee.
- Commonwealth of Australia v The Official Trustee in Chapter as Trustee of the Property of Stephen Vasil  NSWSC 1155 – Financial institution accounts had been opened and loans had been obtained utilizing a number of fictitious names by a bankrupt. The equitable doctrine of tracing was relied upon to get well a few of the funds.
While using an alias by a debtor won’t essentially imply that the debtor will be capable of pervert the course of justice, it may make issues extra sophisticated and expensive to pursue. Collectors ought to at all times confirm the authorized id of a person and, if potential, establish any aliases used.