Bankruptcy restrictions orders (BRO)

Bankruptcy is normally a reasonably simple process and in some cases a relief from all the debts.

However, if it transpires that the debtor deliberately borrowed money with no intention of paying it back then the Official Receiver can make an application for a ‘BRO’.

Simple guide to all you need to know at BRO’s.

What is a BRO?

A BRO is a legal order from the court which extends the period of time for which you have to follow certain restrictions. This can be for anything from 2 to 15 years.

The restrictions are the same as the ones you have to follow during the year before you are discharged from bankruptcy. These indicate that you cannot do any of the following:

• Obtain 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 running 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 that you are still in business with the name in which you were made bankrupt
• act as an insolvency practitioner.

Extra restrictions

With a BRO, you also have to follow some extra restrictions. For example, you can’t:

• Act as a local councillor
• Be a school governor
• Hold certain other positions in associations, governing bodies or professions
• Exercise any ‘right to buy’
• Be a Member of Parliament in England or Wales.

Consequences of a BRO

As well as the restrictions a BRO places upon you, there are other consequences for you if a BRO is made. These include:

• your creditors will be told about the BRO
• the court will issue a press notice about your BRO, which the local newspapers and media can publish if they wish to
• your details will appear on the publicly available insolvency register, which any member of the public can view
• details of your BRO may also be published on the Insolvency Services Restrictions Outcomes webpage.

When can a BRO be made?

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.

When deciding whether to make a BRO against you, the court can take any behaviour into account. It will particularly look at whether you have done any of the following:

• Breaking any of the restrictions that were placed on you before your discharge from bankruptcy
• Deliberately paying off some of your creditors before paying others within the 2 year period before the bankruptcy
• Giving away or selling your belongings/assets for less than they are worth within a 5 year period before the bankruptcy
• Failing to keep adequate records which demonstrate how you have made losses on property or business
• Making an excessive pension contribution before you applied for bankruptcy
• Failing to supply goods or services which you have been paid for, (taking deposits)
• Carrying on a business when you knew you could not pay your debts, (trading with knowledge of insolvency)
• Taking on debts what you knew could not have been paid
• 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 Trustee in Bankruptcy

The Court will also consider whether you have been made bankrupt at any point in the last six years. This does not necessarily mean that the Court will grant a BRO but it would give the Court an idea of how you have managed your financial situation over recent years.

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

If you suspect there is a likely to be a BRO application made against you then it is important to take advice, urgently!

• Bankruptcy offences

If you have received a notice of a BRO court hearing, the most important thing to do is take advice!

Next steps

If you want to find out anything further about this topic then please feel free to call me on 0330 236 9930, 0330 236 9938 or 07961 116321. All conversations will be in strict confidence. You can also email me vee@navigatebr.com

This article is for information and interest only. It is not a substitute for full professional advice, which will take in to account the specific and individual circumstances. Navigate Business Recovery Limited cannot accept any responsibility for any loss arising as a result of any person or organisation acting or refraining from acting on any information.