7 Year Bankrupcty Restriction Order
14 July 2011

The Bankruptcy and Diligence etc (Scotland) Act 2007 introduced a lower limit of 1 year for a bankrupt to be discharged. For many creditors this appeared to be a short period to be subject to bankruptcy restrictions. The Act did, however also introduce Bankruptcy Restriction Orders (BROS) which could extend bankruptcy restrictions for up to 15 years if the bankrupts conduct fell within the statutory definition. There was some doubt as to the extent that BROs would be used. Figures published by the Accountant in Bankruptcy show that since the introduction of the Act 6 BROs have been granted in court and 34 Bankruptcy Restircition Undertakings, a voluntary form of the orders, had been entered into.

On 20 June, Stirling Sheriff Court imposed the longest BRO yet granted with restrictions imposed for 7 years. The Sheriff found that five different grounds of "misbehaviour" had been established, with perhaps the most significant being obtaining credit of £100,000.00 within 4 months of the bankruptcy.

That case, in conjunction with the figures do suggest that in appropriate cases action is taken where the bankruptcy process is abused.