What is a Bankruptcy Restriction Order? (BRO)

March 1, 2018

A Bankruptcy Restriction Order may be made against you if it’s believed that you acted dishonestly, recklessly or unlawfully before you were made bankrupt, or during your bankruptcy.

Your Trustee will inform the Accountant in Bankruptcy (AiB), and if their suspicions are upheld, a BRO of 2-15 years can be made depending on the seriousness of the case.  Restrictions can cover your personal, financial, and professional life, and have a far-reaching effect in many instances.

Why would a Bankruptcy Restrictions Order be granted?

A BRO may be made for failing to cooperate with the trustee at any stage – not supplying the information required for sequestration, for example, or misleading the trustee on the level of debt you owe.

Other examples can include:

  • Selling assets at below their market value
  • Incurring additional debt when you know that it cannot be repaid
  • Fraudulent activity
  • Giving preference to certain creditors over others
  • Gambling
  • Failing to keep proper financial records

What is the effect of a Bankruptcy Restriction Order?

Restrictions involve your personal and business life and include, but are not limited to, the following:

  • Having to inform potential lenders of your Bankruptcy Restriction Order if you’re seeking credit in excess of £2,000 (either singly or jointly), or you’ve incurred debts in excess of £1,000 since being made bankrupt, and are seeking any amount of further credit.
  • Not taking office as a local authority member
  • Not acting as a company director or taking an indirect role in forming, managing, or promoting a company, without express permission from the courts

Breaking these restrictions is a criminal offence, and can result in a prison sentence.

Bankruptcy Restriction Order during or after discharge

A Bankruptcy Restriction Order can be made during or following your discharge from bankruptcy.  The Accountant in Bankruptcy will let you know in writing about the potential BRO, and you have 14 days in which to respond.

If you feel it is incorrect you should let the Accountant in Bankruptcy know in writing, and include any evidence to support your case. This will then be investigated, a decision made as to whether to impose bankruptcy restrictions on you, and for what length of time.

If a Bankruptcy Restriction Order is imposed, it will be added to the Register of Insolvencies (RoI) – a public register that is free to access via the AiB website.

What is an Interim BRO?

The AiB can also make an Interim Bankruptcy Restrictions Order if they believe a debtor may continue to worsen their creditors’ financial position, or otherwise contravene the terms of their sequestration.

This provides more time to make the longer-term decision on whether a full BRO is required, and also its potential duration.

For more information about Bankruptcy Restriction Orders and how they might affect you, call our experts at Scotland Debt Solutions. We specialise in helping Scottish residents to escape debt, and can offer you a free same-day meeting to establish your situation.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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