Bankruptcy restrictions orders
Before you're discharged from bankruptcy you have to follow certain rules, covering things like getting credit and your working life. These are called restrictions. If the official receiver finds out you’ve behaved dishonestly or recklessly, a bankruptcy restrictions order (BRO) may be made against you. This would extend the period of restrictions for anything up to 15 years.
This page explains what a BRO is and the kind of behaviour that could lead to one.
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 two to 15 years.
The restrictions are the same as the ones you have to follow during the year before you’re discharged from bankruptcy, which say you can't do any of the following:
- 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 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 you do business with the name in which you were made bankrupt
- act as an insolvency practitioner.
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.
Other 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 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 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.
The court will also consider whether you’ve been bankrupt at any point in the last six years. On its own, this wouldn’t be a reason to make a BRO against you, but it would give the court an idea of how you’d managed your financial situation over recent years.
If you break any of the BRO restrictions
If a BRO is made against you and you break any of the restrictions, you'll be committing a criminal offence. You could be fined or even sent to prison.
If you've got a BRO and have broken any of the restrictions, you should get advice as soon as possible.
If you've received a notice of a BRO court hearing
If you receive a notice of a BRO court hearing, you can choose to accept the allegations or to challenge them.
- What to do if you've had notice of a BRO court hearing
- You can get advice at your local Citizens Advice Bureau. To search for details of your nearest CAB, click on nearest CAB.
'Bankruptcy restrictions orders' - from the Insolvency Service at www.gov.uk