A Bankruptcy Restriction Order - or BRO -
is an order that the courts will make in a bankruptcy case if they feel that the person who filed for bankruptcy has engaged in culpable or dishonest conduct. The debtor who is given a BRO will find themselves under certain restrictions for a period that is set between two and fifteen years, and they are the same restrictions that every person who goes bankrupt is under during a normal bankruptcy period except for a longer period of time. A normal bankruptcy case will see the restrictions lifted when the bankruptcy is discharged. A BRO is not lifted when the bankruptcy is discharged
What are the normal restrictions on a bankruptcy case?
They include but are not limited to:
So the next question
- Declaring your bankruptcy to a potential lender if you are attempting to borrow more than £500 in credit
- If you are self-employed or part of a business, you must tell your business colleagues and associates that you are bankrupt and the style under which your bankruptcy was granted
- You become restricted from being a company director or taking part in the promotion, formation, or management of a company without prior approval from the courts
- You cannot act as an insolvency practitioner, receiver, or manager of the property of a company on behalf of debenture holders
- You cannot be a member of parlament in England or Wales
- You cannot hold certain public offices
that should be answered here is what are some of the actions that could cause a Bankruptcy Restriction Order to be issued? Here is a list of some of the reasons the courts could issue this against you.
How long the BRO is in effect
- You purposefully incurred debts that you know you could not repay
- You sell assets for less than their market value or give them away for free
- You showed priority to certain creditors such as family and friends than to others
- Your spending was unreasonably extravagant
- You partook in gambling or making bad speculations
- You increased your debts by neglecting your business affairs and responsibilities
- You engaged in fraudulent activities or breach of trust
- You carried on with your business when you should have filed for insolvency
will be determined by the court and the amount of financial harm you have caused your creditors. It is a criminal offence to breech a BRO so it is advisable that you pay attention to the order. If you engage in any of the restricted activities and are caught, you are looking at fines and even possible jail time.
A BRO is not something to take lightly, and if you engage in any of the activities that could cause you to be placed under this order you are looking at serious financial ramifications. It will take longer for you to get back on your feet, and your ability to get a credit line after your bankruptcy is discharged will be severely limited.