Ch 25: Restrictions on Bankrupts (January 2008)

January 2008

Restrictions applicable to individuals subject to bankruptcy orders, bankruptcy restrictions orders, interim bankruptcy restrictions orders and bankruptcy restrictions undertakings

25.1 Introduction

Various disabilities or restrictions are applied under insolvency and other legislation to an individual who is subject to a bankruptcy order and remains undischarged from the proceedings. The restrictions applying under insolvency legislation were previously only triggered by the making of a bankruptcy order and no longer applied after an individual was discharged from bankruptcy.   As a counter-balance to the reduction of the standard period of bankruptcy to one year, the Enterprise Act 2002 (EA2002) enabled the Secretary of State or official receiver, acting on a direction of the Secretary of State, to apply to the court for a bankruptcy restrictions order (BRO), interim bankruptcy restrictions order (IBRO) or accept from a bankrupt a bankruptcy restrictions undertaking (BRU), when it is considered that a bankrupt has committed significant misconduct. Depending upon the severity of the misconduct, a BRO or BRU imposes the restrictions of bankruptcy upon the individual concerned for a period of between two years and fifteen years. [Note 1] [Note2]

This chapter provides guidance to official receivers in establishing which restrictions apply in bankruptcy, and which apply where an individual is subject to a BRO, IBRO or BRU,  including consideration of other legislation, regulations, rules etc. which may apply restrictions on an individual as a result of them having been made the subject of a bankruptcy order or BRO/IBRO/BRU.

 

25.2 Chapter Parts - Index

This chapter is divided in to two sections, Section 1 - Restrictions applicable in bankruptcy, and Section 2 - Restrictions applicable in BROs, IBROs & BRUs. A list of abbreviations used in this chapter can be found at paragraph 25.3.

The sections are made up of the following parts:

Section 1 Restrictions applicable in bankruptcy

Part 1 - Restrictions imposed on bankrupts by insolvency legislation (including CDDA86) (paragraphs 25.4 to 25.19)  
Part 2 – Restrictions imposed on bankrupts by other legislation 
(paragraphs 25.20
to  25.60)
Part 3 - Other considerations concerning restrictions against undischarged bankupts (paragraphs 25.61 to 25.67) 

Section 2 Restrictions applicable in BROs/IBROs and BRUs

Part 4 - Restrictions imposed on individuals subject to BROs/IBROs and BRUs by insolvency legislation (including CDDA86) (paragraphs 25.68 to 25.80)
Part 5 - Restrictions imposed on individuals subject to BROs/IBROs and BRUs by other legislation (paragraphs 25.81 to 25.85) 
Annex – Effects of a bankruptcy restrictions order (schedule issued by Enforcement Section July 2009).

 

25.3 Chapter Abbreviations

The following abbreviations are used in this chapter :

BRO  - Bankruptcy restrictions order
IBRO - Interim bankruptcy restrictions order
BRU -  Bankruptcy restrictions undertaking
LLP  -  Limited liability partnership
IA86 -  The Insolvency Act 1986 
CDDA 86  - The Company Directors Disqualification Act 1986
EA2002 - The Enterprise Act 2002

[On to Part 1] Restrictions imposed on bankrupts by insolvency legislation (including CDDA86)