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i This solution is only available in England, Wales and Northern Ireland.

What is bankruptcy

What is bankruptcy?

If you’re in severe financial difficulty and are considering going bankrupt, you’ll probably have lots of questions about it. Here we’ll tell you more about what bankruptcy is.

The rules around debt relief orders (DRO) have changed. These changes could benefit those considering an insolvency solution like bankruptcy. Please take a look at the changes, as for some people a DRO will be a cheaper alternative to full bankruptcy.

Bankruptcy works differently depending on where you live in the UK. If you’re living in Scotland please visit our page on sequestration (Scottish bankruptcy). If you live in England, Wales or Northern Ireland the information below outlines the bankruptcy process.  

When you go bankrupt almost all of your debts are written off. Deciding to go bankrupt is a big step that involves fees and can impact different areas of your life, such as your job or home.

Need bankruptcy advice?

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Worried about bankruptcy?

Free, online debt advice available now.

Get debt help

Is bankruptcy suitable for me?

Bankruptcy is a form of insolvency and is normally only suitable if you can’t pay back your debts in a reasonable time.

Assets you own, such as your house or car will usually be sold to pay off your debts. This means if your assets are worth more than your debts, or if all of your regular payments are up to date and you can afford to keep paying them, bankruptcy is unlikely to be the best option for you.

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After you’ve been declared bankrupt, your creditors will write off your unsecured debts. This allows you to make a fresh start. Bankruptcy usually lasts for 12 months and you’ll have many financial restrictions during this period. When your bankruptcy ends, you’ll be ‘discharged’ from it.

If you go bankrupt you may find it difficult to take out any further credit, as bankruptcy will remain on your credit file for six years.

How do I go bankrupt?

You apply for bankruptcy by submitting an application to the Insolvency Service in England and Wales,  the Accountant in Bankruptcy in Scotland or the High Court in Northern Ireland.

Common questions about bankruptcy

What debts are included in bankruptcy? Bankruptcy will write off most of your debts.

Can you petition for joint bankruptcy? Joint bankruptcy is not available unless it’s for business partners. You can include joint debts in a bankruptcy but this will impact the other person on the credit agreement.

What is voluntary bankruptcy? Entering into voluntary bankruptcy means applying to make yourself bankrupt.

Can my creditors make me bankrupt? Your creditors could make you bankrupt as a last resort if you can’t, or won’t, pay your debts.

Considering bankruptcy? Get free advice.

Going bankrupt is a big step to take and you shouldn’t start to make yourself bankrupt without getting expert debt help.

We can help you decide if bankruptcy is right for you or recommend a more appropriate debt solution for your circumstances. Try our online debt advice tool for advice tailored to your needs.

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