Bankruptcy Restriction Orders

When it occurs, the bankruptcy is tremendously changing your way of life and functioning of your financial affairs. In this way, we have to make a distinction between the restrictions which are self-imposed and others which you cannot influence directly. First of all, your conduct in the financial area or the series of events lead to your bankruptcy. You cannot handle things as you used to do. This is the primary level of restrictions you actually imposed on yourself and your own finances. You lost your financial sovereignty and you have to make arrangements with your creditors. On the second stage, if your behavior is a strong indication of your recklessness including some fraudulent activities toward your financial obligations, then you are facing bankruptcy restrictions in their full capacity and form of the given orders.

BRO and BRU

There are two bankruptcy restrictions orders: BRO – Bankruptcy Restrictions Order and BRU – Bankruptcy Restrictions Undertaking. In both cases, we have dishonest and reckless behavior of the person influenced by the bankruptcy as the very reason for the introduction of bankruptcy restrictions. The difference between these two types is related to the obligation of going to the court to issue the restriction. BRO includes the obligation of informing the court about the need of installing restrictions for a certain bankrupt person. BRU has the same effects, but without the need to address the court. The time frame for these restrictions can vary from 2 to 15 years. If a person does not comply with these restrictions he or she can face serious consequences including imprisonment or substantial fines.

BRO/BRU Conduct List

The following list of conduct can lead to the introduction of BRO/BRU:
• The lack of records or explanations about the certain loss of money and/or property
• Giving away and/or selling things and/or asses bellow their real value
• Selective deliberate payments to only one individual or group of creditors
• Taking deposits for goods and services without providing them in return
• Continuation with the current business activity despite the full awareness of the insolvency issues
• Intentional creation of new debts
• Gambling and unreasonable luxury behavior
• Fraudulent activities
• The lack of cooperation with the Official Receiver or Trustee

BRO/BRU Restrictions List

The following restrictions are part of the BRO/BRU:
• The obligation to disclose status to creditors for the purposes of obtaining a credit amount of more than £500
• The obligation not to change the name of the current business under which bankruptcy occurred for the purposes of continuation with the business activities without informing all parties with real and potential interest about this fact
• The obligation not to be involved in executive and management roles without previous court’s permission
• The obligation not to be involved in the insolvency and property issues practices
• The obligation not to act as the Member of Parliament, Local Councillor, School Governor and other related positions

Be A Hero. Avoid BRO.

The last thing anyone needs during the bankruptcy is to add some more troubles to an already deeply compromised financial situation. You should never blame yourself for a bankruptcy. In addition, the people around you should do the same. The bankruptcy itself is a storm which sometimes simply cannot be predicted or avoided no matter how hard you push the door or close all the windows of your financial house. However, you can certainly influence the issuance of BRO/BRU in your own case. The process of bankruptcy inevitably brings the problem of stigmatization. Nevertheless, there is a huge difference between a stigma caused by bankruptcy or BRO/BRU. People may say for person in bankruptcy that he or she simply did not have enough luck. They may even feel sorry for that person. On the other side, people will definitely judge a person who is under BRO/BRU restrictions. This is a clear indication about the inappropriate behavior of that person. There is no excuse or justification for any conduct from the list which can cause these restrictions. These kind of things you could have prevented or simply avoided.

Every debt will be paid sooner or later. There is really no need to look for the indecent shortcuts to improve your current situation. You can and you will overcome every financial difficulty including the bankruptcy itself. However, your personal reputation and business image can be irreparably destroyed by your reckless or fraudulent behavior which was followed by BRO/BRU restrictions. Perhaps, you could not have chosen the moment to bankrupt, but you can definitely choose how you are going to prevail this problem. Remember one more very important thing that the main effects of the bankruptcy will be over with its discharge. On the other side, the consequences of BRO/BRU can stay with you for years to come after the bankruptcy.

Andy Gorton is the author and editor of the Bankruptcy Clinic
http://www.bankruptcyclinic.co.uk

Andy Gorton – who has written posts on Bankruptcy Clinic Blog.


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