BANKRUPTCY
Could Bankruptcy give you a fresh start?
Bankruptcy is a formal insolvency solution that can help you deal with debts you cannot afford to repay. It can provide protection from many creditors and qualifying debts are normally written off when you're discharged.
Bankrutpcy at a glance
£680
Application Fee
The current fee to apply for bankruptcy in England and Wales. Can be paid in installments.
Usually 12 Months
Until Discharge
Most people are discharged from bankruptcy after 12 months.
Up to 3 Years
Income Payments
If you have sufficient surplus income, you may be required to make payments for up to three years.
Qualifying Debts
Can be written off
You are normally released from qualifying debts on discharge from Bankruptcy.
What exactly is Bankruptcy?
Bankruptcy is a formal insolvency procedure designed for people who are unable to repay their debts.
If your bankruptcy application is approved, control of certain assets may pass to the Official Receiver or a trustee. They will consider your finances, assets and income and deal with your creditors.
Bankruptcy usually lasts for 12 months, after which you're normally discharged and released from most qualifying debts.
Important: Bankruptcy can provide a fresh financial start, but it can also have significant consequences. Your home, assets, income, employment and ability to obtain credit may all need to be considered before you decide to proceed.
Potential benefits
✅ Qualifying debts may be written off
✅ Creditors must stop collection activity
✅ Legal protection from included creditors
✅ Usually discharged after 12 months
✅ Can provide a fresh financial start
Considerations
❌ Bankruptcy affects your credit file for 6 years
❌ Your details appear on the Individual Insolvency Register
❌ Your home or assets may be affected
❌ Some professions restrict bankrupt individuals
❌ You may need to make payments if you have surplus income
❌ Obtaining credit may become more difficult
Questions about Bankruptcy
How long does bankruptcy last?
Bankruptcy normally lasts 12 months, after which you're usually discharged. Some restrictions can be extended and, if you're required to make payments from your income, these can continue after you've been discharged.
Will bankruptcy affect my credit rating?
Yes. Bankruptcy has a significant impact on your credit rating and will normally remain on your credit file for six years from the date of the bankruptcy order.
Will I lose my home?
Your home can be at risk in bankruptcy. If you own all or part of a property, your beneficial interest may become an asset of the bankruptcy and could potentially be sold or otherwise dealt with. This should be carefully considered before choosing bankruptcy.
Can I keep my car?
This depends on its value and whether it's reasonably necessary for your work or basic domestic needs. In some circumstances you may be able to keep a vehicle; in others, it could be sold or replaced with a less expensive vehicle.
Will I have to make monthly payments?
Not necessarily. If you have sufficient disposable income, you may be asked to enter an Income Payments Agreement, which can require payments for up to three years.
Will my employer know?
Your employer isn't automatically contacted in every bankruptcy, but bankruptcy is a matter of public record. Certain occupations, professional bodies and employment contracts may also have restrictions or disclosure requirements.
What debts are written off?
Many unsecured debts can be dealt with through bankruptcy, including credit cards, personal loans and overdrafts. However, some debts aren't written off, including certain court fines, some student loans and debts arising from particular legal or fraudulent circumstances.
Is bankruptcy public?
Yes. Details of your bankruptcy will normally appear on the Individual Insolvency Register while the bankruptcy is active and for a period afterwards.
How much does bankruptcy cost?
The application fee for bankruptcy in England and Wales is £680. The fee is paid as part of the online bankruptcy application process.
Bankruptcy Alternatives
We'll help you understand the solutions available & what's right for your situation
Individual Voluntary Arrangement (IVA)
Combine your debts into one affordable monthly payment with legal protection from creditors.
Debt Relief Order
(DRO)
A free debt solution that can freeze interest and write off qualifying debts.
Debt Management Plan
(DMP)
Make one manageable monthly payment while reducing pressure from creditors and regaining
To find out more about managing your money and getting free advice, visit Money Advice Service, independent service set up to help people manage their money.