Bankruptcy
Bankruptcy is a formal solution for debts you can’t afford to repay.
It gives you legal protection from creditors and involves applying to the court to have your debts written off.
Some debt solutions have fees. We’ll always explain any costs upfront with no pressure to go ahead.
You can find free debt advice and options to manage your debts from MoneyHelper. You can visit their website at moneyhelper.org.uk to find out more.
What is bankruptcy?
Bankruptcy is a legal process that clears most unsecured debts after 12 months if you can’t afford to repay them. Valuable assets like your home or car may be sold to help repay what you owe.
Bankruptcy is a serious step so it's important to understand how it works and what it means for your home, job and credit rating. We can help you weigh it up alongside other solutions.
How it works
Here’s what the process usually looks like:
We listen
We'll ask about your income, spending, debts and any assets you own to understand your financial situation.
We advise
We’ll talk you through your options and help you understand whether bankruptcy is the right route for you.
You apply
If it's suitable, you’ll need to complete an application online.
Your bankruptcy starts
If approved, creditors can’t chase you for the debts. You’ll usually be discharged after 12 months at which point your debts will be written off.
Benefits and considerations
Here’s an overview of the key benefits and things to be aware of:
Interest and legal action suspended
Creditors won’t be able to take any further legal action or add interest and charges.
Payments for up to 3 years
You may need to make monthly payments for up to 3 years if you can afford to.
Debt write off
Bankruptcy usually last for 12 months. Any unsecured debt will be written off when it ends.
Bankruptcy fees
It costs £680 to go bankrupt in England and Wales. It costs a similar amount in Northern Ireland but the exact amount depends on your circumstances.
Credit rating impact
Your credit rating will be affected which could impact future borrowing.
Insolvency register
Your details will be added to the Individual Insolvency Register.
Online application
You can complete the application yourself online.
Valuable items may need to be sold
Your home and other non-essential items may need to be sold depending on their value.
FAQs
Bankruptcy might be suitable if:
- you can’t afford to repay your debts
- the amount you owe is worth more than the value of your possessions
- you live in England, Wales or Northern Ireland
Bankruptcy can have major impacts on your home, job and credit rating so it’s vital to understand it fully. We’ll help you assess whether it’s the right option for you.
Most unsecured debts can be included, such as credit cards, personal loans, overdrafts, utility arrears and payday loans. Debts like student loans, court fines and child maintenance arrears can’t be written off and will still need to be paid.
It costs £680 to go bankrupt in England and Wales. The amount is similar in Northern Ireland, but the exact amount depends on your circumstances. This can be paid in instalments.
Yes. Bankruptcy will affect your credit score for at least 6 years, which may affect your ability to get credit.
If you own your own home it may need to be sold to pay your debts. However, if there's little or no equity you might be able to keep it. If you rent, you’ll usually be allowed to stay in your home as long as you keep up with rent payments. Some tenancy agreements include a clause about bankruptcy so it’s important to check this.
In most cases, bankruptcy won’t affect your employment. Certain jobs in financial services, accountancy or law might have restrictions. Check your employment contract or speak to your HR department confidentially if you’re unsure about this.
You might be allowed to keep your vehicle if it is essential for work and isn’t deemed valuable by the Official Receiver.
You might be required to make monthly payments for up to 3 years if you can afford to. This is called an Income Payment Agreement (IPA). You won’t be asked to make payments if your income is made up solely of state benefits.
Yes. Our experienced debt advisers will understand your situation, explain your options clearly and help you decide whether bankruptcy is a suitable option.
Start with a simple conversation
Call us on 0161 804 2923 for confidential advice on your options.
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