Bankruptcy restrictions undertaking (BRU) definition

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Bankruptcy restrictions orders (BROs)

Bankruptcy restrictions orders (BROs) A bankrupt is discharged from bankruptcy one year after their bankruptcy commences, unless the court grants a suspension of that discharge by reason of a bankrupt's failure to co-operate with the official receiver (OR) or their trustee in bankruptcy (trustee)—see section 279 of the Insolvency Act 1986 (IA 1986). On discharge, the disqualifications and restrictions which apply to an undischarged bankrupt cease. For further reading on what these disqualifications and restrictions are, see Practice Note: The immediate effects of a bankruptcy order on the bankrupt. What are bankruptcy restrictions orders and why they were introduced? In those cases of bankruptcy which are not simply the result of honest misfortune—but are due to the bankrupt's misconduct or recklessness—it is considered appropriate to ensure that the disqualifications and restrictions imposed in bankruptcy are maintained for a longer period than one year, to protect the public interest and serve as a deterrent. As a result, the Enterprise Act 2002 inserted a new section (IA 1986, s 281A)...

Suspension of discharge from bankruptcy under section 279(3) of the Insolvency Act 1986

Suspension of discharge from bankruptcy under section 279(3) of the Insolvency Act 1986 Recap of discharge from bankruptcy A person’s bankruptcy commences on the day on which the bankruptcy order is made and continues until that person is discharged from bankruptcy (section 278 of the Insolvency Act 1986 (IA 1986)). A debtor is automatically discharged one year from the day on which they were made bankrupt (IA 1986, s 279(1)), unless a criminal bankruptcy order was made (IA 1986, s 279(6)). Until discharged, a bankrupt cannot, among other restrictions: • act as a director of a company (without the leave of the court) • obtain credit above £500 without disclosing that they are an undischarged bankrupt • carry on business (whether directly or indirectly) in a different name from that which they were made bankrupt without informing all people they do business with that they are an undischarged bankrupt • be elected to sit or vote in the House of Commons On discharge: • a debtor has...

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Is it possible for an individual who is an undischarged bankrupt to incur further debts? Can these further debts include non-domestic business rates payable by the bankrupt?

Is it possible for an individual who is an undischarged bankrupt to incur further debts? Can these further debts include non-domestic business rates payable by the bankrupt? STOP PRESS: From 6 April 2017, the Insolvency Rules 1986, SI 1986/1925 were revoked and replaced by the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024. The content in this Q&A may have been affected by this change. What happens to debts upon bankruptcy? All provable debts are caught by an individual’s bankruptcy. Rule 12.3 of the Insolvency Rules 1986 (IR 1986), SI 1986/1925 states that 'all claims by creditors are provable as debts against the company or, as the case may be, the bankrupt, whether they are present or future, certain or contingent, ascertained or sounding only in damages'. Debts which arise after the making of the bankruptcy order (except for those which have arisen as a result of a liability that existed before the making of the bankruptcy order) are not provable debts, and are therefore...

Can a creditor claim against a discharged bankrupt for monies due under a contract entered into with the debtor following the date of the bankruptcy order?

Can a creditor claim against a discharged bankrupt for monies due under a contract entered into with the debtor following the date of the bankruptcy order? Bankruptcy Immediately upon a bankruptcy order being made against an individual, that individual is described as an ‘undischarged’ bankrupt. They will retain that status until they are discharged from their bankruptcy, which will automatically occur on the first anniversary of the bankruptcy order being made, unless any order is made suspending a bankrupt’s discharge pursuant to section 279 of the Insolvency Act 1986 (IA 1986). See Practice Note: The immediate effects of a bankruptcy order on the bankrupt. The role of the bankrupt’s trustee in bankruptcy (trustee) is to realise the assets forming the bankruptcy estate and, after payment of the costs and expenses of the bankruptcy process, to distribute any surplus to the bankrupt’s unsecured creditors. See Practice Note: What assets vest in the trustee in bankruptcy and what steps does the official receiver or trustee in bankruptcy need...

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Restructuring & Insolvency weekly highlights—17 April 2025

This week's edition of Restructuring & Insolvency weekly highlights includes: the Court of Appeal’s judgment in respect of the Thames Water restructuring plan, an analysis of the Supreme Court’s rejection of an attempt to modify the fiduciary profit rule (Rukhadze v Recovery Partners GP Ltd), a discussion on directors’ duty to account (Official Receiver v Haq), examination of the High Court’s decision to dismiss an appeal to overturn judgment finding that a guarantor is personally liable for debts (Jones v City Electrical Factors Ltd), plus a round-up of other news and cases for restructuring and insolvency professionals.