debt advice bureau
the best debt solution for you

FAQs | Features | Tools | News | Books | Newsletters | Links | Polls | Recommend Us | About Us | Home

YOU ARE HERE: Home > News > 2005 > Bad News For Bad Faith Bankrupts

News

2005

Bad News For Bad Faith Bankrupts

2004

2003

2002

2001

RSS

RSS feed available

Bad News For Bad Faith Bankrupts

A growing number of bankrupts are being targeted for Bankruptcy Restrictions Orders (BROs) as Official Receivers pursue those bankrupts who are believed to have acted in bad faith and contributed to their bankruptcy, according to figures released today.

Anyone thinking they can rack up loads of debt and use bankruptcy as an easy way to walk away form their responsibilities needs to think again. "The screw is tightening on those who have been guilty of misconduct", says Desmond Flynn, Inspector General and Agency Chief Executive of the Insolvency Service.

In the six months to September 2005, 165 people have been made subject to BROs or Bankruptcy Restrictions Undertakings (BRUs) for periods ranging from 2 to 11 years. In addition, the Secretary of State has issued directions to take proceedings against another 313 bankrupts and Official Receivers are working on submitting reports on a further 600.

The most common allegations made in support of applications are:

  • Contributing to the bankruptcy by gambling or extravagance

  • Incurring debts with no reasonable prospect of being able to meet the liability incurred;

  • Entering into transactions to prefer friends or relatives ahead of other creditors or at a value less than the true value.

BROs and BRUs were introduced on 1st April 2004 in England and Wales, the same time the length of bankruptcy as reduced from up to 3 years to a maximum of 12 months, as a way of dealing with those bankrupts who were considered to be blameworthy, dishonest or culpable in their conduct leading up to bankruptcy.

BROs or BRUs subject bankrupts to bankruptcy restrictions for between 2 and 15 years and, as with bankruptcy, all BROs and BRUs are recorded on the Individual Insolvency Register, which can be accessed online and searched by anyone.

But BROs are only one way to ensure that bankruptcy is not an easy way to avoid paying back one’s debts. Income Payments Orders mean that whilst a bankrupt may be discharged from bankruptcy after one year, they can still be liable to make contributions from their income for three years.

Just because you’ve been discharged doesn’t mean you stop paying. "If bankrupts can pay towards their debts, they will pay", says Mr. Flynn.

Bankruptcy is not a get-out-of-debt-free card. Bad faith bankrupts you have been warned.

 

Published Friday November 4th 2005.
Article copyright © Clientsmart Limited. Reproduced with Permission.

Consolidation Loans | Debt Management | IVAs | Trust Deeds | Bankruptcy | FAQs | About Us | Features | Tools | Recommend Us | Home | USA
Copyright © Debt Advisory Network 2001-2005 | Terms of Use | Disclaimer | Privacy Policy | Contact Us
debtadvicebureau.org.uk is not responsible for the content of external internet sites.
All trademarks acknowledged. The guidance and/or advice contained within this website is subject to
the UK regulatory regime and is therefore primarily restricted to consumers based in the UK.