In what circumstances can a bankruptcy restrictions order (BRO) be made?
In what circumstances can a bankruptcy restrictions order (BRO) be made?

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • In what circumstances can a bankruptcy restrictions order (BRO) be made?
  • Bankrupt's conduct
  • Other considerations
  • The court's approach
  • Duration of the BRO in light of misconduct
  • Interim BROs
  • Case law on BROs

In what circumstances can a bankruptcy restrictions order (BRO) be made?

Bankrupt's conduct

When deciding whether to make a BRO, the court will consider the bankrupt's conduct. Usually this will be conduct which led to the bankrupt's inability to pay their debts, but the court is entitled to take any conduct into account, either before or after the bankruptcy.

For details of who can make the application, and when and how they do so, see Practice Note: Bankruptcy restrictions orders (BROs)

The Insolvency Act 1986 (IA 1986) lists a series of behaviours on the part of the bankrupt that can be taken into account by the court in deciding whether it is appropriate to make a BRO. These are set out below:

  1. failing to keep records which account for a loss of property by them or by a business carried on by them, where the loss occurred in the period beginning two years before the presentation of the petition on which they were made bankrupt and ending with the date of the application for a BRO

  2. failing to produce records of that kind on demand by the official receiver (OR) or the trustee

  3. entering into a transaction at an undervalue

  4. giving a preference

  5. making an excessive pension contribution

  6. failure to supply goods or services which were wholly or partly paid for, which gave rise to a claim provable

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