Bankruptcy restrictions orders and undertakings

What is a bankruptcy restrictions order (BRO) and a bankruptcy restrictions undertaking (BRU)?

In the spirit of encouraging free enterprise, the Enterprise Act 2002 (EnA 2002) inserted a new section and schedule into the Insolvency Act 1986 (IA 1986) (IA 1986, s 281A and Sch 4A), so that with effect from 1 April 2004, a bankrupt is (usually) be discharged from bankruptcy on the first anniversary of the making of the bankruptcy order, unless misconduct is found. Previously, the period was three years. On discharge from bankruptcy, the disqualifications and restrictions which apply to an undischarged bankrupt cease.

While this reduction may genuinely assist bankrupts who through no fault of their own found themselves bankrupt and are unlikely to repeat the process, it has the consequent effect that bankrupts who were complicit in their own downfall are also able to release themselves from debt after only one year rather than three, and can go on to obtain credit and act free of any restrictions, possibly to continue the previous misconduct.

To counteract the reduction in the period of bankruptcy,

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