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When an individual is made Bankrupt all of their property will vest in (pass to) a Trustee in Bankruptcy, whose job will be to manage the insolvent estate, take in the assets of the debtor and maximise realisations to that person’s creditors.
In usual circumstances a Bankrupt will be ‘discharged’ (the Bankruptcy ends and all of their remaining debts are extinguished) 12 months after the making of a Bankruptcy Order (the latter being known as the ‘commencement of a Bankruptcy’).
If a person is made Bankrupt and the Official Receiver considers they have been dishonest or are to blame for their debts, the court can make a Bankruptcy Restrictions Order (BRO) against them. This is an Order made by the court that extends the length of time a Bankrupt is subject to Bankruptcy restrictions (such as not being able to get credit, or act as the director of a company). The Order can be applied for a number of reasons, lasting anywhere between two and 15 years. In most cases, it is applied due to reckless, dishonest and fraudulent behaviour.
[See ‘Bankrupt’, ‘Bankruptcy’ and ‘Bankruptcy Restriction Undertaking’.]
If a person who has been made Bankrupt accepts that they have been dishonest, or have breached the rules of their Bankruptcy, they may agree to undertake to have the restrictions of their Bankruptcy extended, rather than go to court for a Bankruptcy Restrictions Order to be made.
The same extension of their Bankruptcy may apply as described under a Bankruptcy Restriction Order.
[See ‘Bankruptcy Restriction Order’, ‘Bankruptcy’ and ‘Trustee in Bankruptcy’.]
A second Bankruptcy occurs where a person is made Bankrupt (again) while they are still an undischarged Bankrupt.
In theory, it should prove difficult to get enough credit for a person to go Bankrupt again, but the restriction on credit is that a person cannot get more than £500 without disclosing a Bankruptcy. This makes getting credit possible if an
