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Restrictions and obligations following bankruptcy
On the making of a bankruptcy order, the Official Receiver acts as receiver and manager of the bankrupt’s estate. The bankrupt’s estate essentially consists of all the assets and property which belong to or is vesting in the bankrupt when the bankruptcy order was made. If you are made bankrupt, you have a duty to ensure your estate is delivered up to the OR including all books, papers and other records which related to your estate and affairs. If you acquire further assets or income after the bankruptcy order is made, you have an obligation to inform the OR.
Failure to comply with these obligations is a criminal offence.
A trustee in bankruptcy will be appointed. The OR will usually be appointed first Trustee. Often the matter will subsequently be transferred to a private insolvency practitioner. The bankrupt’s estate automatically vests in the trustee on appointment. The trustee will realise any assets of value in the estate and use those proceeds to pay creditors.
Whilst a bankruptcy remains undischarged, a bankrupt may not do the following:
- Obtain credit for more than £500 without first disclosing his bankruptcy
- Act as a director of a limited company (unless with permission from the Court)
- Trade using any business name other than that in which he was adjudged bankrupt without first disclosing his bankruptcy to all persons with whom he trades
- Act as a Trustee of a charity
A bankrupt has a general duty to co-operate with the Trustee in Bankruptcy to enable them to carry out their duties. This includes giving information to the Trustee, attending meetings and doing anything else the Trustee may require.