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How bankruptcy affects me

Restrictions during bankruptcy

There are some important rules about what you can and can’t do once you’ve gone bankrupt. These are known as ‘restrictions’.

What are bankruptcy restrictions?

The restrictions that are most likely to affect you during bankruptcy:

  • You can’t borrow more than £500 without telling the person or company lending you the money that you’re bankrupt
  • You can’t be the director of a limited company, and you can’t play a part in running a company without a court’s permission
  • You can’t buy a house under the ‘right to buy’ scheme
  • If you’re self-employed, you can’t use a business name which is different to the one you used before bankruptcy, unless you tell everyone you do business with about the bankruptcy
  • You’ll be barred from some jobs, for example being a charity trustee, insolvency practitioner, registrar or consumer credit licence holder
  • If you help another vulnerable person manage their property and affairs using a power of attorney, this will be cancelled
  • You must cooperate with the official receiver. This includes handing over all documents and providing accurate information about your income, debts and assets
  • If you live in Northern Ireland, you won't be allowed to travel outside of Northern Ireland without permission

How long do bankruptcy restrictions last?

In most cases, these restrictions will last until you’re discharged, 12 months after you go bankrupt.

If the official receiver finds that your bankruptcy happened because you acted irresponsibly or dishonestly, they can extend the length of time that restrictions apply. This is called a bankruptcy restriction undertaking or order, and can last up to 15 years. This might happen if, for example, you committed fraud, tried to hide assets, or ran up debts through gambling or similar.

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What happens if you break bankruptcy restrictions?

If your official receiver suspects or finds you breaking these restrictions, they’ll investigate and may need to interview you, or get more information.

If you don’t cooperate, they can also ask the court to suspend your discharge from bankruptcy.

Breaking these restrictions can be a criminal offence, and could lead to a fine or imprisonment in extreme cases. You could also get a bankruptcy restriction undertaking or order, which makes the restrictions last longer.

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If you’re considering bankruptcy, use our online debt advice tool, Debt Remedy, which will provide you with the best solution to your debt problem in around 20 minutes.

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They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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