The bankruptcy restriction order
More often than not, most bankruptcies are straight forward and the term for bankruptcy would generally last around one year.
Once an application for bankruptcy has been made, an Official Receiver will look into your financial affairs to ensure everything is straight forward. This is the point where most people are a little unsure as to whether or not their bankruptcy is accepted as well as whether or not any restrictions may be placed on them during the bankruptcy period.
A Bankruptcy Restrictions Order is only applicable if the OR has found that bankrupt has acted dishonestly in some way. BROs are not something that most people who petition for bankruptcy will experience, as generally most people who do go bankrupt are for genuine reasons and have not acted in a deceptive manner.
For a bankruptcy restrictions order to be applied, the OR would have to consider your behaviour leading up to your bankruptcy.
Some examples which may warrant a Bankruptcy Restriction Order include:
- Failing to provide information explaining loss of money or property
- Giving away assets or selling them undervalue
- Prioritising one creditor over another
- Being in receipt of money for goods which you did not supply
- Carry on trading with the knowledge that you could not afford to repay debts
- Taking on more debt knowing that you could not repay
- Gambling or extravagantly spending
- Fraud
- Failing to providing information to the OR when requested
- Being bankrupt twice within a 6-year period.
If a BRO is applied, this could mean that the term of bankruptcy could be extended from 2 to 15 years. This would be up to the discretion of the OR. Other restrictions include:
- Disclosing you are bankrupt to a creditor if you wish to take credit of more than £500
- Disclose the business or trading name you were under when being made bankrupt to those you wish to do business with
- You can no longer act as a director of a company without the courts prior Agreement
For most people, a BRO will not be applicable. More often than not, when a person is either made bankrupt or petitions for their own bankruptcy, nothing untoward will have happened. The bankruptcy route would have been taken because unforeseen circumstances occurred leaving a debtor with no other option.
BROs are simply made available because a bankrupt deliberately acted in a manner that was deemed as dishonest and is a way of protecting other businesses by making them aware the person is bankrupt should they try to do business which could cause the other business to lose money or goods.
Call our specialist debt team on 08000 915 004 to find out how we could help you.