The most common reasons for a bankruptcy restriction order are:Other reasons for a Bankruptcy Restriction Order are:
- Incurring a debt with no reasonable expectation of being able to pay.
- Gambling or unreasonable extravagance which contributed to the bankruptcy.
- Entering into a transaction at an undervalue.
- Failing to account satisfactorily for a loss of property.
- Entering into a preference.
- Fraud or fraudulent breach of trust.
- Making excessive pension contributions.
- Failing to supply goods that have been either completely or partly paid for, which gave rise to a claim provable in the bankruptcy.
- Neglecting business affairs which were either the cause of the bankruptcy, or made the extent of the bankruptcy worse.
- Having been made bankrupt on a separate occasion in the past 6 years.
- General lack of co-operation with the Official Receiver.
Transactions At Under Value
The Trustee can apply to the Court to have the transaction reversed if either of the following are true.
- The transaction was performed up to 5 years before the bankruptcy, and you were insolvent at the time.
- The transaction was performed up to 2 years before bankruptcy, regardless of insolvency.
Bankruptcy Restriction UndertakingA Bankruptcy Restriction Undertaking (BRU) is like a BRO, but it is an agreement with the Trustee without involving the court. A BRU comes about when you accept the allegations made by the Trustee about your conduct. Due to the ‘guilty plea’, the duration of the BRU is often shorter than if it were a Court imposed BRO.
Effects Of A BRO/BRUA Bankruptcy Restriction Order or Undertaking lasts for between 2 and 15 years.
A BRO extends normal Bankruptcy Restrictions by the length of the order. Additionally, someone subject to a BRO may not:Breach of the bankruptcy restrictions is an offence and can lead to criminal proceedings.
- Borrow more than £500 without telling the lender you’re bankrupt
- Act as a director of a company without the court’s permission
- Create, manage or promote a company without the court’s permission