It’s important to think carefully about declaring yourself bankrupt. Find out more about what it means then talk to a free debt adviser about whether bankruptcy is the best way to pay off or clear your debts. This information is for you if you live in England or Wales only.
Speak to a free debt adviser
Use our Debt adviser locator tool to find free and confidential debt advice online, over the phone or near to where you live.
A debt adviser will:
- treat everything you say in confidence
- never judge you or make you feel bad about your situation
- suggest ways of dealing with debts that you might not know about
- check you’ve applied for all the benefits and entitlements available to you.
Three quarters of people who get debt advice feel more in control of their finances afterwards.
What is bankruptcy?
- Writes off all debts that are allowed to be included in a bankruptcy order. Some debts can't be included, such as social fund loans, student loans, child maintenance arrears or fraudulent debts.
- If you have any assets, they'll be assessed to see if they can be used to pay off your debts. Usually you're allowed to keep some assets, such as tools or equipment you need to carry on working. A debt adviser can explain how this will affect you.
How to apply for bankruptcy
If you’re applying to become bankrupt, you must complete an online application and create an online account.
You’ll need to provide information about your:
- debts
- employment/income
- pension
- bank accounts
- assets
- outgoings.
Including any letters, you’ve received from bailiffs or enforcement agents.
Your application will be reviewed by an official adjudicator who works for the Insolvency Service. They’ll decide if you'll be made bankrupt.
You usually get a decision within 28 days of submitting your application.
There are many ways to deal with debts and bankruptcy might not be the best solution for you. You can find out more about how to apply for bankruptcy at GOV.UKOpens in a new window
How much does it cost to go bankrupt?
Remember
It’s important to talk to a free debt adviser before you pay the fee to make sure that bankruptcy is the best solution for you.
It costs £680 to apply for bankruptcy and you’ll need to pay this before you submit your application.
If you can’t afford the fee you might be able to pay in instalments.
To find out more about this, contact the insolvency enquiry line.
PPI and bankruptcy in England and Wales
If you become bankrupt, any successful claims for the mis-selling of PPI will be paid to your bankruptcy estate, and not to you. Don’t make any claims yourself as you could end up being out of pocket if you pay any fees or commission to a claims company.
Find out more about Payment Protection Insurance (PPI) after bankruptcy at GOV.UKOpens in a new window
What happens after I go bankrupt?
After you go bankrupt, an Official Receiver will be appointed within two weeks of receiving your bankruptcy order.
In order to decide how they can be used to meet your debts, they will assess your:
- income
- assets, and
- outgoings.
You might also be asked to attend an interview with the official receiver.
Your creditors have to make a formal claim to the trustee for the money they are owed. You can’t make direct payments to them and they can’t ask you for payments.
After a period of time (usually one year), most of your outstanding debts are written off and you can make a fresh start.
Until you are discharged from bankruptcy you will remain under bankruptcy restrictions. For example, you won’t be able to apply for credit of £500 or more without telling the lender about the bankruptcy.
You can check your discharge date online using the Individual Insolvency Register at GOV.UKOpens in a new window
Any credit you do get is likely to be expensive both now and in the future. Bankruptcy affects your credit rating and credit reference agencies will keep your details on file for a minimum of six years.
Who is bankruptcy suitable for?
If you have no real way of paying off your debts and few assets, then bankruptcy could be a suitable option.
If you are a homeowner it’s worth looking at other options because bankruptcy puts your home at risk of being sold if there is enough equity in it.
If you’re a tenant, your landlord can apply to evict you legally if you have fallen into rent arrears.
It’s important you don’t make a decision to go bankrupt alone. Talk to a free debt adviser first.
Can I be made bankrupt?
The minimum level of debt for which someone who you owe money can force you into bankruptcy is £5,000.
The process of being made bankrupt is different. But high street lenders rarely use this option and will prefer to work with you to find another way to pay off your debts.
You can find out more about what happens if someone tries to make you bankrupt by visiting GOV.UKOpens in a new window
