Personal bankruptcy

Bankruptcy is different in different parts of the UK:

• Scotland - Visit our section on sequestration (Scottish bankruptcy)
• England, Wales or Northern Ireland - Find out more below

Video: An introduction to bankruptcy

How does bankruptcy work?

Bankruptcy can be a good option for people who cannot pay their debts in a reasonable amount of time.

Some important things to know:

• It is a form of insolvency
• It is legally binding
• Any assets you own (like your home) can be sold to pay off your debts

It is not a good option if:

• Your assets are worth more than your debts
• Your regular payments are up to date
• You can afford to keep paying your debt

Common questions about bankruptcy

How much does it cost to go bankrupt?

Bankruptcy fees depend on where you live in the UK.

England and Wales

You pay a total of £680.

This made up of:

• A £130 fee to the adjudicator, and
• £550 to the official receiver

Northern Ireland

The total cost is £676.

This is made up of:

• A £151 court fee
• A £525 bankruptcy deposit
• Solicitor's fees are around £7

How does bankruptcy work?

Most of your debts are written off when you go bankrupt. But it is a big step.

It involves fees and can impact many areas of your life, such as your job or home.

Personal bankruptcy normally lasts for a year.

During this time:

• You cannot borrow more than £500 without telling lenders you are bankrupt
• You must let the official receiver know of any changes to your budget
• You could be asked to sell items of value like:
  
  • Your home
  • Your car

Does going bankrupt clear all your debts?

Most debts are included in bankruptcy. These debts are written off at the end.

Some debts are not included in bankruptcy, like:

• Child maintenance arrears
• Criminal fines
• TV licence arrears

What happens after a bankruptcy discharge?

• Your debts are written off
• The restrictions placed on you during your bankruptcy are usually lifted

The official receiver can extend the bankruptcy restrictions if your bankruptcy was caused by dishonest or reckless behaviour.

• They do this by a bankruptcy restriction undertaking (BRU) or order (BRO)
• It can last up to 15 years

Bankruptcy is recorded on:

• The Insolvency Register (England and Wales)
• Bankruptcy Register (Northern Ireland)

It stays on these registers until 3 months after your bankruptcy ends.

This can be longer if you have a BRU or BRO.

• You may still have to make payments towards your bankruptcy
• The official receiver will decide if you have to do so