Bankruptcy Restriction Orders
Updated for 2026
If the Official Receiver considers it justified, an application to the Court can be made for a Bankruptcy Restriction Order (BRO) against you. If granted, this can extend your bankruptcy restrictions for between 2 and 15 years beyond the standard 12-month discharge period.
A BRO is a serious matter. Understanding what triggers one, and what it means for your financial future, can help you make better decisions if you are considering bankruptcy or are already going through the process.
Common Reasons for a Bankruptcy Restriction Order
The most common reasons the Official Receiver may seek a BRO include:
- Incurring a debt with no reasonable expectation of being able to repay it.
- Gambling or unreasonable extravagance that contributed to the bankruptcy.
- Entering into a transaction at an undervalue.
- Failing to account satisfactorily for a loss of property.
- Entering into a preference (paying one creditor ahead of others).
- Fraud or fraudulent breach of trust.
Other reasons that could lead to a BRO include:
- Making excessive pension contributions before going bankrupt.
- Failing to supply goods that were either fully or partly paid for, giving rise to a claim provable in the bankruptcy.
- Neglecting business affairs in a way that either caused the bankruptcy or made it worse.
- Having been made bankrupt on a separate occasion within the past 6 years.
- A general lack of cooperation with the Official Receiver during the bankruptcy process.
Transactions at Undervalue
If you transferred assets for less than their worth before going bankrupt, the Trustee can apply to the Court to have the transaction reversed. This is sometimes called a “transaction at undervalue” and is one of the key areas the Official Receiver will examine.
The Trustee can apply to reverse a transaction if either of the following applies:
- The transaction took place up to 5 years before the bankruptcy, and you were insolvent at the time.
- The transaction took place up to 2 years before bankruptcy, regardless of whether you were insolvent.
This is particularly relevant if you have given away property, sold assets cheaply to family members, or transferred money before applying for bankruptcy. For more on what happens to your assets, see our guide on debts not written off by bankruptcy.
Bankruptcy Restriction Undertaking (BRU)
A Bankruptcy Restriction Undertaking works similarly to a BRO, but without involving the Court. Instead, it is an agreement between you and the Official Receiver where you accept the allegations about your conduct.
Because a BRU is essentially a voluntary acceptance (similar to a guilty plea), the duration is often shorter than a Court-imposed BRO. However, the restrictions that apply are exactly the same.
Effects of a BRO or BRU
A Bankruptcy Restriction Order or Undertaking lasts for between 2 and 15 years. During this time, the normal bankruptcy restrictions continue to apply to you, even after your standard 12-month discharge.
While subject to a BRO or BRU, you may not:
- Obtain credit of £500 or more without telling the lender that you are subject to a BRO.
- Act as a director of a company without the Court’s permission.
- Create, manage, or promote a company without the Court’s permission.
- Trade under a different name from the one in which you were made bankrupt, without disclosing the bankruptcy name to anyone you do business with.
Breaching these restrictions is a criminal offence and can lead to prosecution.
Alternatives to Bankruptcy
If you are worried about the possibility of a Bankruptcy Restriction Order, it may be worth exploring alternatives to bankruptcy before you apply. Options such as an Individual Voluntary Arrangement (IVA) or a Debt Relief Order (DRO) do not carry the same risk of restriction orders and may be more suitable depending on your circumstances.
The current cost of applying for bankruptcy in England and Wales is £680. A DRO is now free to apply for (since April 2024) and is available if your total debts are under £50,000.
What to Do Next
If you are considering bankruptcy but are concerned about the risk of a Bankruptcy Restriction Order, it is important to get the right information before making a decision.
You can request a free callback to discuss your situation and explore whether bankruptcy, an IVA, or another debt solution is right for you.
This page provides general information only and should not be taken as financial or legal advice. If you need advice specific to your situation, please speak to a qualified professional.