Bankruptcy Restrictions Order
Bankruptcy Restrictions Order
If you are declared bankrupt and the Official Receiver believes you have been dishonest or are to blame for your debts, the court can make a Bankruptcy Restrictions Order (BRO) against you.
Examples of behaviour that can lead to BRO include:
- Behaving in a fraudulent manner e.g. giving false details to obtain credit
- Neglecting your business so that your debts increase
- Not co-operating with the official receiver
- Paying some creditors in preference to others
- Giving away assets or selling them for less than their value
Please note that the above list does not represent the entirety of cases where a BRO can be made. Any dishonest or blameworthy behaviour could lead to such an order being made. The court is entitled to consider conduct that occurred before or even after a bankruptcy order was made against you.
Importantly being bankrupt for a second time in six years is also a matter to be considered but is not in itself sufficient reason to apply for a BRO.
The fact that you have done one of these things does not mean that you will be automatically subject to a BRO, and it does mean that the Official Receiver needs to look at the conduct and decide whether the public requires protection.
How will I know about a BRO?
The Official Receiver will write to tell you if they plan to apply for a BRO and why, unless less than six weeks remain to discharge you from bankruptcy. The Official Receiver must apply to the court for a BRO before your discharge unless they have permission from the court to apply later.
What is the best way to respond to a BRO?
You will have to respond swiftly as you only have 21 days to reply to the above letter about your behaviour.
You can offer to enter into a Bankruptcy Restrictions Undertaking (BRU) if you accept the allegations against you. A BRU has the same legal effect as a BRO but you do not need to go to court. As you accept the allegations made against you, the period of the BRU may be shorter than if the court made a BRO. If you have any comments to explain your conduct, you can tell the Official Receiver, as this may further reduce the period.
You must however reply. If you do not reply to the Official Receiver within 21 days, or there are less than six weeks until your discharge, the Official Receiver will schedule a court hearing to consider your case. At that point you will be sent details of the case and the date of your hearing. You will be asked to confirm receipt and what you intend to do on a form that you should return to the court within a certain legal period. If you fail to do so you can still attend the hearing but may not take part without the court’s permission.
How can Summit Law help?
Your bankruptcy already places restrictions on what you can do for a set period. A BRO extends this period of restrictions for between 2 and 15 years and subjects you to further restrictions. It is a criminal offence to breach the BRO. Accordingly it must be taken seriously, and you should instruct solicitors straight away. If you have been made the subject of a BRO, or the Official Receiver has indicated he will apply for such an order, please contact us for help and advice. We will negotiate with the Official Receiver to try and reduce the terms of the order, arrange for attendance at the BRO hearing, and tell you what steps you need to take to ensure that you are compliant if a BRO is made.
If you believe that you have unfairly been made the subject of a BRO, we will lodge an appeal on your behalf. If this happens to you, it is important to contact us urgently, as the appeal must be made within 28 days of the BRO.
We can also help you challenge the allegations against you, but you only have 28 days from when you receive notice of the hearing to give your evidence to the court. It is also open to the Official Receiver to provide further evidence in reply to the evidence you submit. The court will take all the evidence into account. We can help prepare your evidence for the court so we will need a detailed understanding of the full background. That will also allow us to access the prospects of successfully defending the action.
Summit Law can help minimise the effect of a BRO or BRU by advising you in connection with and prosecuting a claim on your behalf for permission to continue to act as a Company Director or be involved in the management of a company.
What will happen to me after a BRO or BRU is made?
You will be sent a copy of the BRO or BRU. Once a BRO or BRU has been made, your creditors will also be told.
The details of your BRO or BRU will be listed on the Individual Insolvency Register which is accessible to anybody on the Internet. Further information about the BRO or BRU will also be displayed on the Bankruptcy Restrictions Search Facility for a period of three months but even after this time the public may still request details of the misconduct. The details of your BRO or BRU may also appear in a press release.
What is the best way to respond to a BRO?
You will have to respond swiftly as you only have 21 days to reply to the above letter about your behaviour.
Call our bankruptcy lawyers today
At Summit Law, we offer all our prospective clients a free initial no-obligation telephone consultation, the intention of which is to discuss the background of your case and to offer an opportunity for us to get to know you and more importantly, for you to get to know us.
For more information, please contact our personal bankruptcy lawyers today by calling 020 7467 3980. Alternatively, you can complete the online enquiry form and a member of our team will call you back to discuss your situation. The above is only a general outline of this subject matter and should not be construed as amounting to legal advice. Every case will depend on its own facts.
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