Bankruptcy restrictions

What is a Bankruptcy Restriction Order?

A Bankruptcy Restriction Order (BRO) is a court order, which extends the period of time for which you have to follow certain restrictions. This can last up to 15 years and can restrict your financial affairs.

When can a Bankruptcy Order be made against you?

The Official Receiver can ask the court to make a BRO against you if it believes you’ve acted dishonestly or recklessly before or after you were made bankrupt. Such actions include:

  • breaking any of the restrictions that were placed on you before your discharge from bankruptcy;
  • deliberately paying off some of your creditors before others within the 2 years before bankruptcy;
  • giving away or selling your belongings for less than they’re worth within the 5 years before bankruptcy;
  • failing to keep records which show how you’ve made losses on property or business;
  • making an excessive pension contribution before you applied for bankruptcy;
  • failing to supply goods or services which you’ve been paid for, called taking deposits;
  • carrying on a business when you knew you couldn’t pay your debts, called trading with knowledge of insolvency;
  • taking on debts that couldn’t be repaid;
  • gambling, making rash speculations or being unreasonably extravagant;
  • neglecting your business, causing your debts to increase
  • fraud, such as making a false claim to obtain credit;
  • committing a bankruptcy offence, which may also carry further consequences as these count as criminal offences;
  • not co-operating with the official receiver or bankruptcy trustee.

What can you not do if you are subject to a Bankruptcy Restriction Order?

  • Get credit of £500 or more without telling the lender that you have a BRO;
  • Act as a director or get involved with setting up, promoting or operating a company without permission from the court;
  • Carry out a business in a different name from the one under which you were made bankrupt, without telling everyone you do business with the name in which you were made bankrupt;
  • Be an MP, local councillor, school governor or hold certain other positions in associations, governing bodies or professions.

Failure to comply with a Bankruptcy Restriction Order

If you break any of the restrictions when a BRO is made against you, you’ll be committing a criminal offence. You could be fined or sent to prison.

If you have a BRO and have broken any of the restrictions, you should seek legal advice as soon as possible.

Book an Initial Consultation with Expert Bankruptcy Solicitors and Barristers

We are a specialist City of London law firm made up of Solicitors & Barristers and are based in the legal heart of London in Middle Temple (one of the four prestigious barristers’ Inns of Court) adjacent to the Royal Courts of Justice. We are experts in dealing with matters surrounding bankruptcy including defending bankruptcy petitions; managing bankruptcy applications (including annulments); advising on bankruptcy petitions and offences; and liaising with the Official Receiver.  Whilst we are based in London we provide national coverage across all Courts in England & Wales. We offer free initial telephone advice on bankruptcy matters.

Our expert Bankruptcy Lawyers are able to give specialist legal information and advice relating to bankruptcy matters and connected applications. To contact one of our London solicitors or barristers please click here or call 0207 1830 529.

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