Care and support

Restrictions and offences

There are a number of restrictions that are made during bankruptcy that may affect your day to day activities.

For example, you will usually have to close your current bank or building society account. After the bankruptcy order, you may open a new bank or building society account but only if given permission to do so by the Official Receiver and you should tell the bank that you are bankrupt beforehand. Certain bank accounts called basic bank accounts which do not offer credit facilities may be more suitable. The Financial Services Authority has a useful leaflet about basic bank accounts which can be downloaded from www.moneymadeclear.fsa.gov.uk .

Utility companies, e.g. gas, electricity and water may ask you to pay in a manner that does not involve giving you credit or ask for a deposit. Alternatively you may transfer the account to someone else, e.g. a partner.

Certain kinds of employment may also be affected by bankruptcy, for example people working as estate agents or in the credit industry. If you belong to a professional body which prohibits bankruptcy you could be struck off, e.g. solicitors or accountants.

Details of your bankruptcy will be made public, e.g. notices in local newspapers and trade papers. It is a criminal offence to obtain more than £500 of credit during bankruptcy but even after discharge, many people will find it difficult to obtain further credit. Information of individual insolvencies are held by credit reference agencies for at least 6 years.

Whilst you are bankrupt it is a criminal offence to:

• obtain credit of more than £500 without telling the lender you are bankrupt
• carrying on business (directly or indirectly) in a different name from that in which you were made bankrupt
• being concerned (directly or indirectly) in promoting, forming or managing a limited company, or acting as a company director, without the court's permission, whether formally appointed as a director or not

You may not hold certain public offices, such as a trustee of a charity or a pension fund.

Bankruptcy restriction orders (BRO)

The Official Receiver can apply to the court for a BRO if they think you have been dishonest either before or during your bankruptcy or if you have acted in such a way as to make matters worse, e.g. trading or taking out credit when you knew you couldn't pay your debts or not keeping proper accounts.

A BRO can last between 2 and 15 years and means you are subject to the same restrictions as an undischarged bankrupt, e.g. cannot take out more than £500 credit without informing the lender about the order, becoming an MP, local councillor or Insolvency Practitioner or be a director of a company or form a company without permission.

Alternatives to bankruptcy

There are some alternatives to bankruptcy. Informal arrangements that reschedule your debts, an administration order or an individual voluntary arrangement may be more suitable.