Individual Insolvency - Bankruptcy Restrictions Orders

Hello Manners, rectal coil and I'm embarrassed. A 36 group and I practice in housing property on commercial. This webinar today is being produced in conjunction with data not you know, a lot about individual insolvency. Bankruptcy, namely, bankruptcy restrictions. Orders on undertaking how the Lakers will provide you with a brief summary off different types off undertakings and restrictions. Orders what the procedure is for them to be applied for on what they involved in the long time tool. So turn to power my slide number. Two. You'll see that those reference to three types be alright. Be argues that I'd be ah Rose. The all rights are bankruptcy restrictions. Orders bankruptcy restrictions. Undertakings will be on years on interim banquet. The restriction orders are I br rose Now the 1st 2 bros br use extend the period of restrictions imposed on bankrupts. His conduct is deemed irresponsible, reckless or otherwise culpable. Those restrictions are identical to those of banquet is subject to before being discharged from the banqueting debts. What they do continue to apply beyond discharge. So what are the main restrictions that unknown discharged bankrupts place? Well, there are two really is closing that status to credit provider well, credit exceeding £500 if that is what is asked for. I'm disclosing the name or there's any trading style under which they were made bankrupt if they were trading. There's also the restriction that they cannot act as a company director without the court's permission as well. Because make bureaus by imposing restrictions effectively on the bankrupts activities for a period of time that's convey from two years to 15 years. It does depend on how bad their misconduct is. Really, it may be that br oken be avoided by having the bankrupt making an undertaking to accept restrictions on any post discharge activities. And that's what a. B R. U is. So that's the main difference between bureaus and B. I use br rows of that to be imposed on you. Where is yours is where there's a little bit more of a compromise between yourself and the courts or your clients in court. But the difference, though, that one of similarities there that be our use of the ah road do have the same impact. There are calls reasons for automatic discharge, but well on the's are highlights the PowerPoint slide three Andi. Essentially, the policy behind trying Teoh ream you or have an automatic discharge, uh, is Teoh. Try and ensure that your miracle stigma I rehabilitation donation to match with bad perhaps has taken place or to give somebody the opportunity to start again. Ordinarily, automatic discharge would occur on the first anniversary of making all the bankruptcy order. That would be the the ideal situation on this time. Here comes from the Enterprise Act of 2002 principally Section 257 which is inserted by schedule for a insolvency act off 1986 with effect from most of April 2000 and four. Essentially, this is where you'll find the alleged of background bankruptcy restrictions regime, which sets out that it applies. Teoh individuals predominantly would be made bankrupt due to misconduct or recklessness. I designed to address any public concern about any early discharge, but what's that achieved in section 257? That the automatic discharge, as I discussed earlier, occurring on the first anniversary, initially waas three years from the commencement of bankruptcy, but now it was reduced it to one. So I'm being discharged from bankruptcy disqualifications and restrictions which apply to an un discharged bankrupts than maps. So that's what happens with automatic discharge. Of those reasons for automatic discharge, regions are also helped me set out in the white paper blowing consultation. Find the insolvency service in April 2000 which then led to the Enterprise at 2002. So what happens on results Matic discharge is that Bank wrote can carry on business without restrictions being applied during the bankruptcy. So, for example, they may act as a director of a limited liability company unless there is a disqualification order. Because I can't be Dr Scott Cage in order to come. Being parents, they cannot obtain credit without disclosing their status on. They could also be involved in the general management of a company again, assuming there is no disqualification. The that is what automatic discharge is on the reasons for it. But like I say with BR rose in particular at the restrictions coming place for between 2 to 15 years, depending on how bad the bankrupts misconduct ears. So don't confuse the two you trying periods that we are talking about bros br years, and then how much discharge keeps it on the and enterprise out 2002 section Teoh are seven, so you may recall that I just referred to directors and how they can be disqualified in case you're wondering where that comes from. It's from the Company Directors Disqualification Act of 1986. This is better designed to remove. Will restrict the activities are what would then perhaps the former director of a company. Andi applied Disqualification can be for a period of time. It can be as long as 15 years, for example, on the whole idea is disqualified directors. They cannot be involved as a director or in any real way that involved any sort of management. Oh, limited companies. This has bean disgusting interaction is discussed in case law. So this is helpful, Discuss indicated. Run How our it is round How an official receiver. It's a very good case because it highlights the role on the You like the way we are. Rose operate with the C d. D. A. I. The Company Directors Disqualification Act of 1986 on the several principles of that case were as follows. First principle is that it is appropriate that the court would make Boro I've got a restriction order for at least a minimum of two years, except before grid of 2 to 15 years. This is the case with that time indication came from. There's also the fact that the second prison principle is that the regime is designed to the banquet. Your engine is designed to protect the public against irresponsible financial conduct and to ensure that others don't do the same. So it's basically they re meeting that danger to the public by having a Biaro imposed. The third is that the court has a role in considering whether it's appropriate to make Boro having regard to that conduct. The fourth is up. There's an out of court bill to responsibility. It's not necessary for Boro. Basically, there might be mitigating factors which may assist in trying to suggest that misconduct could be given, but it need not really relate in any event to in this conduct example, it could be that Director Waas having personal life difficulties, Andi, whilst that had absolutely nothing to do his or her work life, it might be that behind the scenes of subconsciously it did and they definite made decisions that perhaps you might not have made other ones that might be a mitigating factor. Things like a rush. Breakdowns from the Children. It's very illness. Those kind of things might be mitigating factors, and that's more importantly, the final principle is that there is a threshold. And that's threshold is that the conduct is such that one is not living up to proper standards of competence or probity guarding their financial plans, their proper standards or competence off competence or probity. Those bottom saying exercise has to be taken, yes, my mitigating factors. But is their conduct so bad that they have lacked competence on bond? There's a question mark as to whether they can continue in that capacity is a director of a company or any company in the future. So whilst those of the key factors to bear in mind, as you can see from PowerPoint, slide for ran power makes clear that grants to Biaro is not discretionary. But there are those factors which the court may consider, but only insofar as determining the gravity off the misconduct. If there is a finding off misconduct than the rule of thumb is that the are a should be granted. But what constitutes misconduct may be affected by the consideration of those factors. But it's strictly speaking. It's not discretionary. Once there have been a finding of misconduct, and that's what the main principle is from Randhawa is to take away from this weapon are what is conservative. Granting would be all right. Well, they're such grounds to consider, and the court will make a B R O where appropriate. Having regard to conduct of the bankrupt on the road, it's part off. The statute is paragraph two protection one, scheduled for a of the insanity after 19 2086. Andi. It also may involve considering information gathered by the official receiver or trustee in bankruptcy, buying a public or private examination bankrupt. So you may find if you appear in a court when these are considered, or in any bankruptcy proceeding of this kind of nature that there might well be somebody from Peshawar. Steve is off this you actually in attendance to provide information effectively in the interest of the public eye cut before the principles behind the ah Rose. It is to try and protect the public as much Senate announced from someone misconduct of financial dealings so as you can see from Parliament Slide five are opposed to paragraph two protection to search for a insolvency Act of 1986 Because this state's at the court shall in particular take account of any of the following kind of behavior on the part of bankrupt Burned to keep records which account for loss of property by the bank wrote or by business carried on by him or her. Ordinarily, when the loss occurred in the period. Begin interior with making the bankruptcy application or the presentation banquet to petition and ending with the data application. BR. It's a time period that one would look out innovation to los off records or property by the bankrupt. In particular, the second is fired. Produce records of a kind on demand Lupus receiver or trustee bankrupt. Take as a separate board. Official Receivers act in the public. Interest is only right that they are given copies of all of the records that relevant to determination with not Biaro granted a sack. 1/3 is entering into a transaction at undervalue. Please see Section 339 Insolvency Act 1986. There is also the giving of a preference which will find a Section 304 TV Salvati Act of 1986. There's a first supply goods and services which were world your partly paid, which gave rise to a claim provable well, bankruptcy. It might be that you are trading time before commencing to the bankruptcy ing when you knew or ought to have known that you were unable to pay your debts. It might be a fair to account satisfactorily to the court the fish receiver or trustee in bankruptcy for lots of property or insufficient use off property. Teoh meet bankruptcy debts. It might be that there has been completely blacked of business affairs, a committing a fraud or a portion of bridge up trust. And if he turned to power points 56 they're also further examples. So, for example, going to cooperate might be key one current data, which you have new. You would have no worries my expectation of being able to pay all your client if you're quiet, someone who we are. And finally, the court will also have regard Teoh whether the bankrupt Wasson on discharged bankrupt at some time during the period of six years, ending with the date of the bankruptcy, to which the official receivers bankrupt. The, uh restriction order application relates. So those are the things that the court will inevitably have to consider when determining whether or not we are should be made. Don't forget the tested, whether that has bean misconduct. So all of the things that I found in paragraph to use protection to schedule for a salty after 1986 are in relation to what? My counters with conduct providing fighting misconduct. There is no discretion who don't forget the case that I mentioned earlier. We talked about a pair to the parties on the principles behind bros. And any mitigating circumstances which may apply Teoh, maybe lead to violent off. They're not being misconduct because it hasn't quite crushed through cross the threshold because of potential. All the reasons so turn to powerful. It's like seven. You may be wondering, Well, how do you make applications? We are what we need to be aware of my client myself. Well, the court may make a B R on the application either the secretary of state of the department, Department of Business, Energy on industrial Strategy or on the part of the special receiver who is acting on the direction secretary of state and the reason why I was applicators and made okay. But being made by by those in your job, If you like organizations, is again because they represented the public. The public interest in large the application procedure is sat out in quite some detail. Chapter two, part of loving the insolvency rules 2016. But they're just a couple of things that I want to bring to your attention so that you're at least a word at first is the time limits for making applications. If there's application for B, R O would normally be made within the first out of virtually commencement of bankruptcy, because this period may be extended. So remember earlier to the various distinctions between the time periods. That's something that you have Teoh very mind, You know, the words are automatic discharge that is, to be considered one of Paul scared of automated discharges that first anniversary to make a bankruptcy order there is a site of the company made the statement births of time that it took an actual Boro Boro what people appeared to 15 years. I'm not a B r o like I say, it must be made within the first anniversary off the commencement off the bankruptcy. So there's a three time periods that you need Teoh consider. But they are all very different, replied different stages. If there is a need. Teoh Macon extension off that time period, you can do so subject to paragraph 31 Judge of War. A Insolvency act 1986. The court can therefore extend time and by on application may. There's also the effect off suspending discharge from bankruptcy, which Husky considered as well again this final chapter to your part in Lebanon are central to 16 on, also under section 279 subsection three. The Insolvency Act 1986 in that if the bankruptcy discharge from bankruptcy has in fact been suspended under Section 2009 that the time ceases to run will make Biaro application. We see paragraph three to shed report A insulting actually to six for about point in particular, the words Is it time limits that you have two Very mind whoever you're representing that whether you are representing or you indeed are the official receiver was actually staying your Jenna's or indeed you are, you will find a way to bankrupt themselves. There are all those time limits that have to be considered and are very important in these cases. In case you're wondering in what circumstances the court may extend the period of time for an application made with B r O. I not restrict its the one year time bar. There can be an application, May does assert under paragraph 31 and Cheddar for a soldier at 1986 on the night with circumstances that justify the late application, which may not be satire legislation. But in any event the applicant must have a good reason. So, for example, it might be that the bankrupt has had assets abroad that they've been hiding or concealing. But just being able to try and establish what's really been going on with those assets well, that financial ties, Um, and therefore it meant that need to be more investigations for determining if br over something that could or could not be done. So it's not necessary set out in the legislation under paragraph 31 But what it what Paragraph 31 does is allow the court to make an extension of time on it. That is so, but the application made a bunch them, and they find it was a good reason. But the actual reasons could be a whole host of mutants rather than just one that for that's why it doesn't it's not set out in up to the detail in the insanity rules or in the Insolvency Act of 1986. As I said earlier that the official receiver will often do report at one difference with official receivers. When they do, report says that they're not required under so procedural there any rules, but principally fuel Cup rule 11 point to its natural town 16. There's no expectation that the official receiver actually verifies these reports by statement off truth in case you're wondering where the case lives on that look official. Receiving Bayless in 2017 at that is on reporters. But what that demonstrates is that they report may be far to start off a witness statement on that if there is a report that need not be ashamed to tree, that's what was 11.2 on 12.29 The solitude rules 2016 so that thought they cannot be an argument for saying there has been a breach of Article six, for example, the European Convention of Human Rights. That bean that bean disadvantage. Well, that's a breach of them ones, right? With trial, it doesn't impact. So when all of that procedure is gone through in the quarter side, yes, this theme is conduct. Yes, I'm going to therefore make a finding that there has to be a br don't have discretion. Then the decision is made as to whether not it should be. About two years, three years, four years and so on. Up to 15 years on that Paragraph four, subsection two general for a Insolvency act 1986. Which sets out that time period. But they didn't, As I said, a time period would be. Ana Rivera depends on how bad and how severe that misconduct is on the part of the bankrupt. But when it be alright, does come into force on it is made. It ceased to have a fact on a date specified by the order, and that's paragraph ball. One judge a boy. The Insanity Act 1986. So that's BR rose. My bankruptcy restriction orders don't confuse these with interim bankruptcy restrictions. Borders which now seen a PowerPoint slide. Eight. I I be our eyes entering bankruptcy restriction Orders are made by courts if there are part of basic grounds for beyond road. Therefore, these are applied for and can be made in the time period following a Biaro application on when that we are applications. Heard of court, of course, like with Biaro, has to be in the public interest as well. And if you want to have a look at paragraph 51 paragraph five to settle for a insolvency act of 1986 that steps out those reasons or whether I be I be already may be granted. Unlike of the I wrote, the court may only make an i b r o on application the secretary of state or official receiver at night direction of the Secretary of State. We see paragraph by free chateau for a silencing act 1986 without me. All right, they have the same factors br raise their basically just for like I say, that particular time period they're going to force when they are made and they seem to have a factor of the determination of the application for the bureau or there's not acceptance by the banquet to be Are you back with restrictions, undertakings? Or is the court discharges its eye on the application person Applied Threat or the Bankrupt and Teoh have a look at that. It's paragraph five for Probably 55 Shuttle for a insolvency Act 1986 which stepped up those three points, which you see on slide eight. No in i b r o is made against bankrupt. If it is, the Boro isn't subsequently made. The duration of the IRA commences on the date the I B R O was made. So that's another little point. Very mind, not a paragraph six to schedule for a solid capped off 1986. So essentially interim bankruptcy restriction orders are next. They are like your right, and there's a danger already arguing your substantive case would apply for an idea right before you're ready, perhaps do you to to put the best case forward for your PR. Oh, if they've already put in the application of time might be of the essence and so on, where you don't think that you would be able to get an extended period of time allowed by the court chunk article reason, whatever it might being. But otherwise they are. By all accounts, the same will be all right. So just pull a set period until such time, the court makes a final decision. Think of it as being like an interim injunction into injunctions. Never intended to be permanent, that they are interim. They are meant to be temporary thing until there's been a final decision. But I gather has to be still probably fishing grounds for why there would be an injection in the first place at Final Herring. This is the same kind of logic. Finally, there's a bankruptcy restrictions undertaken. You'll see that that a bankrupt make off of bankruptcy restrictions undertaken to the secretary of state. And that's a paragraph 71 scheduled for a salty 1980 six. I went to turning. Whether that be a backwards restriction done to take him, the secretary of state will have to consider matters specified in paragraph two to prepared up to three scheduled for a insolvency act 1986. You see paragraph seven, tears shed for a Psalm 96. In case you're wondering those principles. I was returned to earlier the programs to two paragraphs 23 of Schedule four a, which you will find a PowerPoint slides five on six So those a again would have to be considered by the secretary of state when there is an off of a banquet to instructional to taken by the bankrupt. So essentially, you've got a nice sort of methodology there, or you've got a nice along with tick tick box. Let's check kissed off what you need to account for. You don't need to prove that all of them exist. You need to prove that some of it exists. In other words, you might find has been afraid to cooperate, but you may not find that they have been unwilling. I bankruptcy. You know whether to provide the paperwork. It might have been the one to do. Cooperate in other ways. It might be that there has been a breach of trust, but they are cooperating or the might be a breach of trust. But they are also bailing. Teoh pay into a pension contribution will make an excessive payments into pension contributions case. Maybe we're taking money for themselves that personally and not a capacities director Courtney, for instance, so those are the same principles that would have considered grounds for making Biaro. But you see, it's like five and six have heard up to protection to judge or a insult. Chapter 1986 should also be determined by the secretary of state and considered when they are faced with the possibility are green to backups. Instructional taking with bag went off. Present a pack of eight of schedule 4 18 70 up to 1986 at the effect of bankruptcy. Restricted undertaking such that any reference in legislation Teoh person on individual subject to Biaro that includes also reference to at the br you So it's the same effect s actually a bankruptcy at restriction orders. But as I mentioned, not some subtle distinctions at that. I have added Teoh before the very beginning of this webinar. That's the duration of activity restrictions undertakings. Thes restrictions are trying. Time periods are set out in paragraph 91293 Instead, report a sans Act 1986. But essentially, if we are, you comes into force, been accepted by Secretary of State, and it will see to have backed you know, today specified in the beyond you and I could be. Although it can be between two and 15 years on which, beyond you is accepted on on the application by the bankruptcy of the court, of course, can also know would be are you, uh, provide for Beaulieu to cease to have effect on the date specified. So if it is that the the bank wrote does actually want to be wrong with their life, perhaps. And they feel that this bill you is guest in the way it might be that they want to make the application to know be are you that is available to them on that subject. Paragraph 91 Art in paragraph 934 A of your salty out tonight in each six. So, in terms of the enormity of bankruptcy order on a backup to restrictions order at the application or the procedures set out in Section 200 need to abduction 18 Insolvency Act 1986. If you turn to PowerPoint, slide 10. That's what makes reference to the rabbit parts of the act. And here there are to Mathis was one of section two iTunes, also to 6128 to 1 day with World Insolvency Act 1986 But dealing with the first Where are bankrupt crop The order is annulled under section 2 80 years of section one A of the insolvency after 1986 Any Boro any interim br or be are you which is in force shall be annulled like we know we are Oh, I br which coming right And I could be no you be all you made by the bankrupts which is capable of being accepted by the secretary off state That's also have set out the rules on the act. There is also the second, which is bankruptcy order which could be normal section t 61 or section 282 subsection one being Insolvency Act of 1986. So where bankruptcy orders have sold under these provisions, I where the bank represent into your an individual voluntary agreement, an idea or the bankruptcy depths expenses have been paid in full, then in or what she'll have shall not affect any Biaro. I've Biaro or be are you? The court may make it be iro on an application instituted before the Norman told her application for Boro or I'd be our maybe not be instituted after normal and to be Are you can be accepted by thes secretary of state if uttered by the bankrupt. So that's a subtle difference. Jeans action to it to 2 to 1 A. It's actually 261 or 2 18 1 big in turn them finally to PowerPoint slide 11 ISS. When there's a breach of bankruptcy restriction orders, what happens? Do you register that? The short answer is yes. You do need to register br rose I br Rose on B. I used that they're available for inspection and asked the role of Secretary of State. I have to keep registered off off those Andi, Therefore the insolvency register. It's kept live available to public for public inspection. According to chapters 5 to 8 of Part 11 The Silencio Old Stars 16 Bureaucrat Rules, 11 points 3 to 11.23 Social 2016 About that civilized Nancy I off. It's called the Individual Insolvency Register. Factually, it's actually bring them off the if the individual solvency banquets restrictions and that really restrictions registered to gathering one onto the information to be registered when added to the i I r. Inside cause I set out in rose 11.3 to 11.23 Book principally 11.20 often subtitled $2. 16. So just follow example. Would register the duration of the i g r o b r u b r o The court in which it was married. Uh, the bank rose or debtors off patient. There is only a gender of the bankrupt debtors, the gender of the bankrupt or data um, date when a br oh, sorry, beyond use accepted. So there's a kind of things that you would expect to find on the register. And if they are missing than the secretary of state, it might be that you want to race that you feel that's inaccurate, you're bankrupt. Or if you're a member of the public and you want to raise it, become obviously former secretary state in the usual way. Um, a little touch bacon Judah. Sure, if you given that there are restrictions in place with B, R O or B, are you? If one ends up breaching the terms off the b r o R B r u Roy in an I V R. There is a criminal offence. Last of offense. It's a criminal offence. It's not so section to come up. That individual is liable to imprisonment if that happens, or I find on this is set out in Section 350 Subsection six on Station reported 430 on Schedule Talent Insolvency Act of 1986. If one ends up taking part in the company's management, even if they are not I So the director of a company put they are responsible for deaths off that company during that period, then that also forward in the bracket of being a potential reach. But also, if you do take part in the copies management, financial affairs or depth, there's a danger that you may be compressed. Reliable those debts again. That's something that may be considered to be a breach of the restrictions. We see Section 15 off the 1986 c c d d i company Doctors to Squat Disqualification Act. It might be that 1/3 party enables individual Teoh actually breach that b r o B are you, but that the party may also be prosecuted as well. So these are really serious there are, as I say, different types that's br raise br use Abby are raise. The impact of the already is potentially more stern than to be. Are you the reasons I gave the very beginning with this webinar? Do you bury mother different time periods that apply at different stages? So automatic discharge will come? First anniversary, ordinarily off when at the bankruptcy. Two minutes. Norman applications may be made, but in any event, bros in particular are not discretionary waas. There have been a final misconduct subject para back to protection to of the principles that you will find there. If there has been a finding that there is misconduct, there is no reason for discretion. But it's part of firing of misconduct. You can consider to court whether or not there has bean maybe mitigating circumstances, which may lower what might, Because of his conduct, down to just four management of the pope to lack of competence and lack of property. I do hope that's been helpful. Webinar. It's a bit of a whirlwind tour of a bit of a dry topic. I appreciate it a lot of rules, a lot of paragraph numbers, but I do hope that's try to condense it in the best way possible of what can almost quite a complicated area, if you don't you don't know the rules particularly well.