Individuals who have become bankrupt as a result of ‘gambling, speculation or unnecessary extravagance’ are out of luck with the Insolvency Service, which has more than doubled the number of bankruptcy restriction orders (BROs) citing these issues over the past two years, according to research by Moore Stephens
The firm’s analysis shows the number of BROs filed against individuals for ‘gambling, speculation or unnecessary extravagance’ has increased three years in a row. It has gone up 150% in the last two years alone, from 16 in 2014/15 to 40 in 2016/17.
Moore Stephens points out that BROs limit an individual’s access to credit and can prevent them from becoming a director of a company for up to 15 years, effectively ruling them out from leading future business ventures for as long as the order lasts.
Mike Finch, restructuring and insolvency partner at Moore Stephens, said: ‘With the Insolvency Service taking such a tough stance, it is crucial individuals do not underestimate the consequences of being declared bankrupt as a result of gambling, speculating or unnecessary spending.
‘BROs can have a significant impact on daily life. They not only inhibit an individual’s ability to borrow and engage in business ventures, but information about a BRO is made publicly available by the court through press notices and a register.
‘Breaking these restrictions is a criminal offence which could result in heavy fines and even a custodial sentence. Anyone unsure of what their BRO means or if they have broken any of the restrictions, should seek professional advice as soon as possible.’