Debt Solutions


What is Bankruptcy?

Available to those living in England, Wales and Northern Ireland, bankruptcy is a formal insolvency process whereby your debts are written off. In Scotland, it’s known as sequestration.

You can apply for bankruptcy yourself. In some cases, one or more of the creditors you’re in debt to can petition to make you bankrupt – known as a bankruptcy order, or bankruptcy petition. For a bankruptcy order to be successful, you must owe a minimum of £5,000 in unpaid debt to creditors.

Bankruptcy is actioned through the Insolvency Service in England and Wales and the High court in Northern Ireland. If you apply for bankruptcy, you pay a fee of approximately £680.

Being made bankrupt is an extreme option for people who cannot pay their debts. All your unsecured debts are entered into bankruptcy, including mortgages, and you’ll have to surrender your home to the agreement. Once your bankruptcy is completed, however, you will be debt-free and able to make a fresh start.

What happens when you declare Bankruptcy?

Once your application has been approved, creditors you owe money to are no longer allowed to contact you or take further legal action to get the debt repaid.

Being declared bankrupt usually involves selling items you own that are of high value, such as your car or house, for money to pay towards your debts. You may also have to make a monthly payment towards your debt if you earn enough.

Bankruptcies typically last for a year, and at the end, any remaining debt you have is written off. However, details of your bankruptcy proceedings will be listed on the public insolvency register and can affect your career opportunities – for example, you won’t be able to direct a company.

How do I declare myself Bankrupt?

To declare yourself bankrupt, you’ll need to fill in an application online. You can apply for bankruptcy on the government website (, You’ll be asked to provide details about the debts you owe, your income and your outgoings.

If you’ve been contacted by bailiffs or debt collectors, you’ll also need to include copies of any letters you’ve received from them.

This information will then be sent to an Official Receiver/Adjudicator to review the application and decide whether or not to declare you bankrupt.

The decision is usually made within 28 days. It’s worth bearing in mind that you’ll need to pay the £680 fee before submitting the application.

Can I apply for Bankruptcy?

Bankruptcy should always be a last resort for dealing with your debt as it can have a drastic impact on your life.

If you’re thinking about applying for bankruptcy, you should consider the following:

  • Is your total debt level more than the value of all your possessions?
  • Are you unable to repay your debts in a reasonable time?
  • Do you have little or no spare income that could be used in a monthly payment scheme, such as an IVA?
  • Are your circumstances unlikely to change any time soon?

Can I apply for joint Bankruptcy?

Joint bankruptcy is available if you and a business partner have taken out debts together. In these cases, you can make a joint application for bankruptcy, as long as everyone involved agrees.

Couples are not able to apply for joint bankruptcy. You must apply individually, even if the debts are jointly owned.

If you have joint debts, where you are both named on the credit agreement, and one of you goes bankrupt, the other person will be responsible for paying the full amount owed on their own.

Can I declare Bankruptcy as a business owner?

Going bankrupt can have serious implications for your business. You should seek debt advice and consider your options before you begin bankruptcy proceedings.

Bankruptcy as a self-employed business owner

The Official Receiver will decide whether you can continue trading once you begin the process to become bankrupt.

You may find your business can continue operating if you are a sole trader, but there’s also a chance the Official Receiver will decide to sell the business in order to put the money raised towards your debt relief.

Bankruptcy as a PLC

A consequence of beginning bankruptcy proceedings is that you will no longer be able to act as director of a company. If you are currently the director of a PLC when you begin the process to go bankrupt, you must step down from your position until you pay back what you owe.

Not only will you be barred from being director of a company during the process of going bankrupt, even after you finish making payments towards your debts, and your remaining debts are written off, you will not be able to manage a limited company without getting the permission of the court.

How much does it cost to go Bankrupt in the UK?

It costs £680 in total to apply for bankruptcy in the UK. The cost breaks down as follows:

  • UK = £130 as an adjudicator fee – NI = £151 Cheque payable to NI Courts & Tribunals Service.
  • A bankruptcy deposit of £550 in the UK / £525 in NI
  • (You will get this money back if your bankruptcy application is rejected)
  • If using our solicitors – Approx. £220
  • Affidavit to be signed – £5 to £10

You may be able to pay this money in instalments. Alternatively, you can settle this fee upfront using a debit or credit card. It’s important to note that your bankruptcy won’t begin until you have paid this fee in full.

You can apply to make yourself bankrupt on the Insolvency Service website, or by following each step here ( ) on

Bankruptcy and transgender

The Gender Recognition Act states that it is an offence for someone to disclose a gender change wrongfully to others.

However, for bankruptcy, disclosure is allowed for the following reasons:

  • It’s made by or to an official receiver or insolvency practitioner (IP)
  • It’s needed for the official receiver or IP to carry out their role
  • Disclosure is made by someone who knows you have a gender change certificate, and the information is included in the disclosure

Your trustee will decide whether your previous gender will need to be disclosed as part of your information. This information will be disclosed if:

  • It’s required to protect or recover possessions
  • It’ll help companies identify debts owed to them

What are the advantages of Bankruptcy?

  • Future Hope – Allows you to make a fresh start, usually within a year.
  • Immediate Stress Reduction – Eliminates the pressure of dealing with the companies you are in debt to, as all communication with them has to go through an Official Receiver.
  • Improved Peace of Mind – The companies included can no longer take legal action against you.
  • Some Financial Stability – You’ll be able to keep enough money to live on as well as essential belongings – including a car worth £1,000 or less if it is needed for work.
  • Some Work Stability – If you’re self-employed, you can keep any items necessary for your trade.
  • Some Potential Home Stability – You may also be able to keep your home if it has little to no equity in it.

NB – Any advantages are dependent upon individual circumstances and are not guaranteed.

What is the downside of filing for Bankruptcy?

  • Your credit rating will be negatively affected for six years after your bankruptcy.
  • It will be put on a public record.
  • Your home is likely to be sold if it has a lot of equity in it.
  • Cars over the value of £1,000 are usually sold, however, if a friend or relative pays the difference then it’s possible to keep it.
  • Some jobs are affected by bankruptcy, for example, you won’t be able to work as a company director or be involved with the management of a limited company while you’re bankrupt. You can also no longer practice as a solicitor, accountant or in other financial services.
  • It comes with a cost – you will need to pay £680 to go bankrupt.
  • Bankruptcy can also affect a person’s application to become a British citizen and their status as a person of independent means.

Bankruptcy process

Get free advice

Going bankrupt is an extreme debt solution that has a big impact on your income and credit file, so it’s important to seek debt advice from a financial expert before you begin a bankruptcy application. There are several debt charities, like Citizens Advice & AdviceNI, who may be able to give you debt advice for free.

Debt charities will explore how much debt you are in, how many creditors you owe money to, and how much you can reasonably afford in payments towards your debts. This analysis allows them to help you decide if going bankrupt is a viable option for you, or whether you would be better with an alternative debt solution like an Individual Voluntary Agreement (IVA) or Debt Relief Order (DRO).

If you decide on going bankrupt, make sure you withdraw enough money to live on for the time being. If your bankruptcy is approved, your bank accounts will be frozen.

Make your Bankruptcy application

You can apply for bankruptcy online and fill out the application in your own time. You must also pay a fee – in England and Wales, this is £680, and in Northern Ireland, it is £669. It is possible to pay this fee in installments.

Acceptance and agreement of terms

If your application for bankruptcy is accepted, your bank and/or building society accounts will immediately be frozen, and your case will be assigned an ‘Official Receiver’.

This Receiver is someone who decides, based on your circumstances, whether you need to make monthly payments towards your debts, and which of your assets should be sold.

Once the bankruptcy comes into effect, control of your money and possessions is transferred to the Receiver. Details of all bankruptcies are recorded on the public Individual Insolvency Register.

Cooperate with the official receiver

At the start of your bankruptcy, you will be interviewed by your Official Receiver – this can be done in person or over the phone.

The Receiver then becomes responsible for distributing profits from your savings, and the sale of any assets, between your creditors.

As the Official Receiver acts as a mediator between you and your creditors, at this point, your creditors will no longer be able to contact you. During your bankruptcy, you’ll also need to open a new bank account for wages and living expenses.

Discharge from Bankruptcy

If you cooperate with your Official Receiver, you’ll be discharged from your bankruptcy after 12 months. At this point, your remaining debts will be written off. We’d recommend that you ask for a letter of discharge as proof that the process is completed.

If you’ve been making monthly payments towards your debts, these may continue for up to two more years after your discharge.

It’s important to understand that bankruptcy negatively impacts your credit score and will remain on your file for six years from the time it began.

Once you have been discharged, you can begin to rebuild your credit score.

What happens at the end of Bankruptcy?

Bankruptcies normally end after a year. Your Official Receiver will let you know when your bankruptcy comes to an end.

Most debts that have been included will be written off, with the exception of a few debts like court fines and student loan debt.

It’s important to note that after a bankruptcy, you could still have a bankruptcy restriction order made against you – this can restrict your financial affairs for up to 15 years.

This order can be made for a number of reasons, including lack of cooperation with the Official Receiver or if you take on debts knowing you won’t be able to pay them back.

Where can I get debt advice and find out more about Bankruptcy?

If you are in debt to multiple creditors and are looking for a debt solution that will allow you to make a fresh start, applying for bankruptcy may be an option worth exploring, but it’s important you get debt advice before making a final decision.

If you’re looking for more information on bankruptcy, or a company has begun proceedings to make you bankrupt and you’re in need of money advice, you can contact us today on 02895 380906. One of our advisers will be happy to talk you through the next steps.

Our Work

We work closely with several local debt charities including and providing training and support. Linda Wilson, our Voluntary Sector Services Manager, works closely to ensure that our services are accessible to those most in need.

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