Bankruptcy Restriction Orders
When you are declared bankrupt an 'Official Receiver' will be appointed to your case. If during their investigations they decide that you are to blame for your circumstances, or that you have not adhered to the bankruptcy order in the expected way, they may ask the court to issue a Bankruptcy Restriction Order. If the court deems it appropriate to issue the order, following the evidence submitted by the official receiver, the restrictions imposed can last anything from two to fifteen years and can quite severe.
The official receiver must file for the order within twelve months of the initial bankruptcy order being made. However, if the receiver decides it necessary they may apply for an interim Bankruptcy Restriction Order while they prepare the documents to apply for the full-blown restriction order. When deciding whether to grant the order the court will look at the circumstances leading up to and during your initial bankruptcy hearing. Remember, the official receiver and the court will be watching your every move. A wrong decision now could spell disaster.
The Restrictions
As the name of the order suggests, there are some restrictions that can be placed on a bankrupt person who fits into the categories above. These restrictions can be severe, although some of them will not affect the ordinary man in the street seeking to solve their debt problems. Essentially the restrictions can be any or all of the following:
- You will not be allowed to become or remain a member of parliament in England or Wales. Scotland has its own rules.
- If you are a member of the council you may not be able to hold your position in the community.
- You may not be a director in a company or start a business without the courts permission. If you go ahead without permission you will be held responsible personally for any debts that the company incurs during its trading.
- You have to declare your bankruptcy status if you intend to apply for a loan over £500.
- You have to tell anyone you wish to trade with about your bankruptcy and the name under which it was filed.
- You are not allowed to advise other people on debt.
Failure to adhere to the Bankruptcy Restriction Order.
If you fail to comply with the restrictions placed on you under the order, you could be prosecuted. When it goes to court, if you are found guilty, you could end up in prison. At the very least you could face a hefty fine. The last thing you need now is more debt. Make sure you go out of your way to adhere to the restrictions placed on you to avoid any further action being taken against you. Remember the more inappropriate your behaviour towards your creditors, the more harshly the court will judge you.
If at any time your bankruptcy is annulled it follows then that your Bankruptcy Restriction Order will also be cancelled. However, if your bankruptcy is cancelled due to clearing all your payments or the taking out of an IVA the Bankruptcy Restriction Order will continue to be in force until it is revoked.
