The Insolvency Service punished 32 individuals who went bankrupt as a result of excessive gambling or unnecessarily extravagant spending last year according to new analysis by Mazars.
The Insolvency Service secured Bankruptcy Restrictions Orders (BROs) against these 32 individuals to prevent them from resuming the gambling, rash speculation or extravagant spending that contributed to their bankruptcy.
Mazars says that a court can issue a Bankruptcy Restrictions Order at the request of the Insolvency Service if they believe an individual was responsible for their own bankruptcy. BROs can have a dramatic impact on individuals, limiting their access to credit and preventing an individual from becoming a company director for up to 15 years.
Paul Rouse, Partner at Mazars, said “These restrictions are serious weapons in the Insolvency Service’s armoury. They are only used when an individual has ended up in bankruptcy because of their own reckless behaviour.”
“People drawn into risky trading or gambling must be aware of the risks these orders pose – it is not just as simple as declaring bankruptcy and walking away from debts they have accumulated. Any individual that breaks these restrictions commits a criminal offence, risking fines or even a custodial sentence in the most serious cases.”
“With the rise of cryptocurrency trading and ‘meme stocks’ over the past year, the number of people becoming bankrupt due to speculation is likely to increase. This kind of risky behaviour will catch the eye of the Insolvency Service when investigating bankruptcies.”