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

Bankruptcy. Is it right for you?

Bankruptcy can help rid you of debt that would otherwise take years to clear. But it has serious implications for your future and should never be undertaken lightly.

Bankruptcy is not available if you live in Scotland. In Scotland, sequestration is a similar solution, but it's important to note that it has different benefits, risks and fees associated with it.

Bankruptcy advice at a glance

Benefits of bankruptcy Risks
It can be one of the quickest ways to give yourself a fresh start. If you have any assets, like a house or car, these may be included in your bankruptcy.
All your unsecured debts are written off. It may have implications for your job – for instance you will not be able to act as a company director.
You will receive no further contact from your creditors. You may find it difficult to take out credit, as bankruptcy will remain on your credit file for six years.

Watch: An introduction to bankruptcy

Important information about bankruptcy

Bankruptcy should not be taken lightly as it is a big step and any assets you own (e.g. car/house) will usually be sold. Bankruptcy will also be registered on your credit history for six years and could affect your job.

In some cases, you are asked to make monthly payments towards your debts from your available income. This is known as an income payment agreement, and can last for three years.

You should always get expert advice before making the decision to go ahead with it.

Is bankruptcy suitable for me?

Bankruptcy (like an IVA) 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.

Bankruptcy works differently if you live in Scotland. Read our page on bankruptcy in Scotland for more information.

How does bankruptcy work?

When you go bankrupt almost all of your debts are written off, allowing you to make a fresh start. However declaring yourself bankrupt is a big step that involves fees and can impact many areas of your life, such as your job or home.

In the UK, personal bankruptcy normally lasts for a year. During this time you can’t borrow more than £500 without letting the creditor know you’re bankrupt. You must also declare any changes in your circumstances to the official receiver. You could be asked to sell valuable assets such as your home or car, but you’ll be able to keep the things you need for day-to-day living.

How much are bankruptcy fees?

Bankruptcy fees vary throughout the UK. In England and Wales you pay a £130 fee to the adjudicator and £550 to the official receiver, a total of £680. For more details of varying UK charges see bankruptcy fees.

What next? Applying for bankruptcy.

  1. The first step is to see if bankruptcy is the right debt solution for you. You can do this online by using our Debt Remedy tool or by speaking to one of our advisors.
  2. If bankruptcy is right for you then we'll give you information on how to apply, and explain the risks and benefits of going bankrupt.
  3. Bankruptcy is not the best option for everyone – we may well be able to help you with more appropriate and less severe ways to solve your particular debt problem.

StepChange bankruptcy advice

Get bankruptcy help FREE personal debt advice in 20 mins

Complete our Debt Remedy tool online to see if bankruptcy is right for you

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Why choose us?

Bankruptcy is a big step, we'll make sure it's right for your situation.

  • Tailored advice We tailor our advice to your situation, and you can be confident that if we recommend it, bankruptcy really is your best option.
  • Our help is FREEWe won’t charge you a penny for the help and support we provide,

Bankruptcy guide

Read our fact sheet for key information on bankruptcy.

Download bankruptcy fact sheet

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
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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