A guide to Bankruptcy

WHAT IS BANKRUPTCY RESTRICTION ORDER (BRO)

This is new and imposes restrictions on a bankrupt whose conduct has been negligent or reckless. These will generally apply after the bankrupt has been discharged and can run for between 2 and 15 years. Reckless conduct can be gambling, borrowing money knowing you have no means to repay it back.

WHAT IS AN INCOME PAYMENT AGREEMENT (IPA)

This is new and imposes a legally binding written agreement between the bankrupt and the Official Receiver or Trustee that requires the bankrupt, or a third party, to make specified payments to his or her Trustee for a specified period. This will be enforceable as if it was an IPO made by the Court. An IPA will detail the period for which it is to have effect and that the period can apply after the bankrupt has been discharged. The agreement will not extend more than three years after the date of the IPA. The IPA can be varied in writing.

WHAT IS AN INCOME PAYMENT ORDER (IPO)

Upon the application from the Trustee in bankruptcy the Court issues an order that the bankrupt makes a payment to the Trustee in contribution towards his or her debts, this order will usually last for 3 years. These orders are generally not contested and can only be varied upon application to the Court by either the Trustee or bankrupt.