Bankruptcy restriction orders (BRO)
A bankruptcy restriction order (BRO) is a type of order that can be made against someone who has been bankrupt in the UK. The order restricts what the person can do with their money and property. It also lasts for a certain period of time, which is usually 15 years.
These are extra restriction that apply to you during bankruptcy but potentially after bankruptcy as well.
Because you have not be cooperative or compliant with the official receiver (or whoever is dealing with your bankruptcy), have broken the laws around bankruptcy, have been dishonest and anything similar.
Anything between two and 15 years, depending on the severity of your case.
What specific offences would invoke a BRO?
-
Taking on debts that you knew you would not be able to pay back.
-
Neglecting your businesses financial situation.
-
Selling your assets and belongings under their value.
-
Preferring to pay some creditors over others two years prior to bankruptcy.
-
Breaking any bankruptcy restriction.
-
Gambling.
-
Taking on deposits for work you have not delivered.
-
Dishonesty.
What are the consequences of being found guilty of a BRO?
-
Unable to borrow more than £500.
-
Cannot be a Director of any company nor be involved in setting one up or promoting it – unless prior permission is sought via Court.
-
Cannot carry out your business under a different name. You would have to tell everyone that does business with you the name of the business that went bankrupt.
-
You cannot practice as an Insolvency Practitioner, local councillor, school governor, be a Member of Parliament (England and Wales), have any right to a ‘right to buy’ nor old any other position at a government body or similar.
Will anyone find out about the BRO?
-
Your creditors.
-
Local newspapers.
-
The insolvency register.
-
The Insolvency Services Restrictions Outcomes webpage.
This is a criminal offence. You could be served with a fine or a prison sentence.
You will be summoned by the Court.
What happens if you’re served with a BRO hearing
The person in charge of your bankruptcy will apply for a BRO hearing. The Court fixes a date around six weeks after the BRO application.
You will get a copy of the application, which outlines why you might be eligible for a BRO. You have to acknowledge you have received this letter within two weeks of receiving it and and decide whether you accept or reject the allegations.
If you reject the allegation, the case will likely be heard in Court. Here the charge may be dismissed or delayed (if there is a need for further information). If you are found guilty, the BRO will be made.
If the Court does not have enough evidence to decide whether to place you on BRO, you may receive an interim BRO, which puts you on the same restriction as you were throughout the bankruptcy (even if you have been discharged).
The interim BRO is not automatic. The person in charge of your bankruptcy may apply for an interim BRO.
It would normally be based on things like the extent to which your Creditors lost their money, how aware you were of your behaviour and actions and the chances of you repeating the (alleged) offence.
You’ll have to gather the relevant evidence to prove your innocence at the court hearing.