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Bankruptcy Help & Advice

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Bankruptcy is a legally binding debt solution that’s often used as a last resort if you are having debt problems and you can’t repay your debts in a reasonable amount of time.

What is bankruptcy?

Available to those living in England, Wales and Northern Ireland, bankruptcy is a formal insolvency process whereby your debts are written off. In Scotland, it’s known as sequestration.

Applying for bankruptcy is done through the Insolvency Service in England and Wales and the High Court in Northern Ireland. If you do apply to go bankrupt, you’ll need to pay the fee of £680.

Being made bankrupt is an extreme option for people who cannot pay their debts. All your unsecured debts will be included in your bankruptcy, including mortgages, so you’ll have to surrender your home to the agreement. Once your bankruptcy is completd, you will be free of your debts and able to make a fresh start.

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What happens when you declare bankruptcy?

Once your application has been approved, the companies you owe money to are no longer allowed to contact you or take further legal action to get the debt repaid.

Being declared bankrupt usually involves selling things you own that are of high value, such as your car or house, for money to pay your debts. You may also have to make a monthly payment towards your debt if you earn enough – known as an Income Payments Agreement.

Bankruptcies typically last for a year, and at the end, any remaining debt you have is written off. However, details of your bankruptcy proceedings will be listed on the public insolvency register and can affect your career opportunities – for example, you won’t be able to direct a company.

How do I declare myself bankrupt?

To declare yourself bankrupt, you’ll need to fill in an application online. You can apply for bankruptcy on the government website, You’ll be asked to give details about what debts you owe, how much income you have, and what your outgoings are.

If you’ve been contacted by bailiffs or debt collectors, you’ll also need to include copies of any letters you’ve received from them. This information will then be sent to an official adjudicator, who will review the application and decide whether or not to declare your bankruptcy.

You’ll usually find out the decision within 28 days. It’s also worth bearing in mind that you’ll need to pay the £680 fee before submitting the application.

Should I apply for bankruptcy?

Bankruptcy should always be a last resort for dealing with your debt as it can have a drastic impact on your life.

If you’re thinking about applying for bankruptcy, you should consider the following:

  • Is your total debt level more than the value of all your possessions?
  • Are you unable to repay your debts in a reasonable time?
  • Do you have little or no spare income that could be used in a monthly payment scheme, such as an Individual Voluntary Arrangement (IVA)?
  • Are your circumstances unlikely to change any time soon?

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Can I apply for joint bankruptcy?

Joint bankruptcy is available if you and a business partner have taken out debts together. In these cases, you can make a joint application for bankruptcy, as long as everyone involved agrees to it.

Couples are not able to apply for joint bankruptcy. You must apply individually, even if you would consider yourself the joint owner of all your debts.

If you have joint debts, where you are both named on the credit agreement, and one of you goes bankrupt, the other person will be responsible for paying the full amount owed on their own.

Can I declare bankruptcy as a business owner?

Going bankrupt can have serious implications for your business, so if you’re a business owner, you should seek debt advice and consider your options before you begin bankruptcy proceedings.

Bankruptcy as a self-employed business owner

It will ultimately be down to the official receiver to decide whether you can continue trading once you begin the process to become bankrupt.

You may find your business can continue operating if you are a sole trader, but there’s also a chance the official receiver will decide to sell the the business in order to put the money raised towards your debt relief.

Bankruptcy as a PLC

One of the consequences of beginning bankruptcy proceedings is that you will no longer be able to act as director of a company.

If you are currently the director of a PLC when you begin the process to go bankrupt, you must step down from your position until you pay back what you owe.

Not only will you be barred from being director of a company during the process of going bankrupt, even after you finish making payments towards your debts, and your remaining debts are written off, you will not be able to manage a limited company without getting the permission of the court.

How much does it cost to go bankrupt in the UK?

It costs £680 in total to apply for bankruptcy in the UK. The price is broken down into two parts:

  • £130 as an adjudicator fee
  • A bankruptcy deposit of £550 (you will get this money back if your bankruptcy application is rejected)

You may be able to pay this money in installments. Alternatively you can settle this fee upfront using a debt or credit card. It’s important to note that your bankruptcy won’t begin until you have paid this fee in full.

You can apply to make yourself bankrupt on the Insolvency Service website, or by following the steps here on

Bankruptcy and transgender

The Gender Recognition Act states that it is an offence for someone to disclose a gender change wrongfully to others.

However, for bankruptcy, disclosure is allowed for the following reasons:

  • It’s made by or to an official receiver or insolvency practitioner (IP)
  • It’s needed for the official receiver or IP to carry out their role
  • Disclosure is made by someone who knows you have a gender change certificate and the information is included in the disclosure

Your bankruptcy trustee will decide whether your previous gender will need to be disclosed as part of your information. This information will be disclosed if:

  • It’s required to protect or recover possessions
  • It’ll help companies identify debts owed to them

What are the advantages of bankruptcy?

  • Allows you to make a fresh start, usually within a year.
  • Eliminates the pressure of dealing with the companies you are in debt to, as all communication with them has to go through an official receiver.
  • The companies included can no longer take legal action against you.
  • You’ll be able to keep enough money to live on as well as essential belongings – including a car worth £1,000 or less if it is needed for work.
  • If you’re self-employed, you can keep any items necessary for your trade.
  • You may also be able to keep your home if it has little to no equity in it.

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What are the downsides of filing for bankruptcy?

  • Your credit rating will be negatively affected for six years after your bankruptcy.
  • Personal bankruptcy will be placed on a public record.
  • Your home is likely to be sold unless you have little or no equity in the property
  • Cars over the value of £1,000 are usually sold, however, if a friend or relative pays the difference then it’s possible to keep it.
  • You’ll be left with few or no assets of value
  • Some jobs are affected by bankruptcy, for example, you won’t be able to work as a company director or be involved with the management of a limited company while you’re bankrupt. You can also no longer practice as a solicitor, accountant or in other financial services.
  • It comes with a cost – you will need to pay £680 to go bankrupt.
  • Bankruptcy can also affect a person’s application to become a British citizen and their status as a person of independent means.

How to initiate bankruptcy proceedings

Get free advice

Going bankrupt is an extreme debt solution which will have a big impact on your income and credit file, so it’s important to seek debt advice from a money expert before you begin a bankruptcy application.

There are several debt charities, like Citizens Advice or the Money Advice Service (now Money Helper), who may be able to give you debt advice for free.

They will explore how much debt you are in, how may creditors you owe money to, and how much you can reasonably afford in payments towards your debts, before helping you decide that going bankrupt is a viable option for you, or whether you would be better with an alternative debt solution like an Individual Voluntary Agreement (IVA) or Debt Relief Order (DRO).

Apply to the Insolvency Service

You can apply online for bankruptcy via the Government website, here. Make sure you read the application carefully, and always provide accurate personal or financial information. Alternatively, you can apply by contacting the Insolvency Service directly.

You must also pay a fee – in England and Wales, this is £680, and in Northern Ireland, it is £669. It is possible to pay this fee in instalments.

Acceptance and agreement of terms

If your application for bankruptcy is accepted, your bank and/or building society accounts will immediately be frozen, and your case will be assigned an ‘official receiver’.

This receiver is someone who decides, based on your circumstances, whether you need to make monthly payments towards your debts, and which of your assets should be sold.

Once the bankruptcy comes into effect, control of your money and possessions is transferred to the receiver. Details of all bankruptcies are recorded on the public Individual Insolvency Register.

Cooperate with the official receiver

At the start of your bankruptcy, you will need to be interviewed by your official receiver – this can be done in person or over the phone.

The receiver then becomes responsible for distributing profits from your savings, and the sale of any assets, between your creditors.

Because the official receiver acts as a mediator between you and your creditors, at this point, they will no longer be able to contact you. During your bankruptcy, you’ll also need to open a new bank account for wages and living expenses.

Discharge from bankruptcy

If you cooperate with your official receiver, you’ll be automatically discharged from your bankruptcy after 12 months. At this point, your remaining debts will be written off. We’d recommend that you ask for a letter of discharge in case you need to prove this.

If you’ve been making monthly payments towards your debts, these may continue for up to two more years after your discharge.

What happens at the end of bankruptcy?

Bankruptcies normally end after a year. Your official receiver will let you know when your bankruptcy comes to an end. Most debts that have been included will be written off, with the exception of a few exempt debts like court fines and student loans.

It’s important to note that after a bankruptcy, you could still have a bankruptcy restriction order made against you – this can restrict your financial affairs for up to 15 years.

This order can be made for a number of reasons, including lack of cooperation with the official receiver or if you take on debts knowing you won’t be able to pay them back.

Does bankruptcy affect your credit report?

You will face certain bankruptcy restrictions during the course of your bankruptcy that will make things like opening a basic bank account more difficult. But you will also be impacted even after the bankruptcy period has passed.

The most obvious medium-term impact of bankruptcy is the lowering of your credit score. This is a score given to you by credit reference agencies – the higher it is, the more likely lenders are to let you borrow money.

Bankruptcy will lower your credit score, meaning you may find it harder to do things like take out a loan, even after you have been discharged from bankruptcy and your outstanding debts have been wiped. Your bankruptcy will impact your credit rating for a period of six years, after which you can begin to rebuild your credit profile.

What is a bankruptcy petition?

Not all bankruptcy filings are initiated by the individual involved. In certain cases, a creditor (or creditors) will begin a legal proceeding against you with the aim of making you bankrupt. This is known as a bankruptcy petition.

If you owe over £5,000 in unsecured debt to creditors and they have tried and failed to collect what you owe, either through a statutory demand or enforcement action, then they may feel a bankruptcy petition is their best chance of recovering their money.

In this scenario, they will apply to a court to have you made bankrupt. If the court considers bankruptcy suitable, you will be declared bankrupt and your all your assets will be placed in the hands of the official receiver.

Any valuable assets will be sold to repay creditors, and the rest of the bankruptcy process will proceed as normal.

Where can I get debt advice and find out more about bankruptcy?

If you are in debt to multiple creditors and are looking for a solution that will allow you to make a fresh start, applying for bankruptcy may be an option worth exploring, but it’s important you get advice before making a final decision.

If you’re looking for more information on bankruptcy, or a company has begun proceedings to make you bankrupt, you can talk to Creditfix. One of our money advisers will be happy to talk you through next steps.

Frequently asked questions.

Need more info? Here are a few of our most frequently asked questions on this topic. If you don’t see the answer you’re looking for here, give us a ring – we’d love to help.


It’s very unlikely that being declared bankrupt will affect your current employment, but there are some exceptions to this if you work in certain professions, for example, the financial industry.

If you run your own business, you’ll have to surrender this to the trustee, so you won’t be able to continue trading with that business. You can begin a new business, but it’ll be especially challenging to get any credit to help you.

Even though you are normally discharged after 12 months, bankruptcy will be noted on your credit file for six years. After this, your details will be removed.

Although it is possible to buy a house after you’ve been made bankrupt, though it will be more difficult. Generally, it’s best to wait around two years before applying for a mortgage after bankruptcy, as you’re more likely to get better terms and interest rates – it also gives you time to rebuild your credit score.

Yes – when you submit your application online, an adjudicator will decide whether or not to grant your bankruptcy. As such it is possible for it to be denied.

This is often done if they feel you are able to pay back your debts or if there is another route you could go down that would be a better fit for your situation.

Bankruptcy is a legally binding debt solution that’s often used as a last resort if you are having severe financial problems that mean you can’t repay your debts in a reasonable amount of time.