How to Apply for Bankruptcy Protection Through BRS

Kenyans unable to repay their debts can apply for bankruptcy protection through the Business Registration Service (BRS), a legal process designed to help debtors resolve financial obligations while protecting the interests of creditors.

Once declared bankrupt, a trustee is appointed to manage the individual’s assets and oversee the distribution of proceeds to creditors under the supervision of the Office of the Official Receiver.

Step-by-Step Guide to Applying for Bankruptcy Protection Through BRS

To start the bankruptcy process, one is required to prepare the prescribed forms available on the BRS website under the Official Receiver and Insolvency section.

They include Form No. 10, which is a Bankruptcy Petition, Form No. 8, Supporting Affidavit, Form No. 9, Application for Bankruptcy Trustee, and Form No. 11, Statement of Affairs, which contains details of the applicant’s financial position, including assets, liabilities, and creditors.

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Step 1: Filing of the Petition

At this stage, a debtor is required to prepare a bankruptcy petition containing accurate information about their financial circumstances, including a list of assets, liabilities, and creditors.

Thereafter, a petition is then filed in the High Court closest to the applicant’s place of residence or business before being submitted to the Office of the Official Receiver under the Business Registration Service, where the State Counsel reviews the application to ensure it complies with all legal and procedural requirements before it proceeds to the next stage.

Step 3: Payment

Once the petition has been approved, the applicant is directed to pay the prescribed statutory fees at the BRS accounts office.

When the payment is done, the State Counsel is then required to issue a Certificate of Compliance, confirming that the application has met the required procedural standards for the bankruptcy proceedings to start.

Step 3: Court Order

During this stage, if all legal requirements are satisfied, the High Court issues a Bankruptcy Order declaring the individual bankrupt, which must be published in the Kenya Gazette to notify creditors and the public within 30 days.

Following this issuance, the debtor may be required to submit a Statement of Affairs, while the Official Receiver may convene a creditors’ meeting to determine how the bankrupt’s assets will be administered and distributed.

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Step 4:Trustee Appointment

A trustee is then appointed to manage the bankrupt person’s estate.

Here, they will take control of the debtor’s assets, administer the estate, and ensure proceeds are distributed fairly among creditors while operating under the supervision of the Official Receiver.

Step 5: Discharge Process

A person declared bankrupt may be discharged after three years, provided no objections are raised during the process.

Once discharged, the individual is released from personal liability for most debts covered by the bankruptcy order, allowing them to rebuild their financial affairs.

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