Bankruptcy
A formal way to deal with debts you can’t pay back. Most of what you owe could be written off, usually after 12 months. It has serious effects, so weigh it up carefully.
Roughly how much do you owe?
It takes about 5 minutes, and there’s no obligation to go ahead.
- About 5 minutes
to answer a few questions online
- No obligation
nothing goes ahead unless you agree
- A partner debt firm
we pass your details to one
- A real person
an adviser can call to talk it through
At a glance
Where it applies: England and Wales. Northern Ireland has its own process. Scotland uses sequestration, with different rules.
- Where it applies
- England and Wales (Northern Ireland and Scotland differ)
- How long
- Usually 12 months before discharge
- Recorded
- On your credit file and a public register
General information, not advice about your situation. Limits, fees and lengths change, and the rules differ across the UK.
Why people choose it
A formal way out
It can matter if you owe more than you could ever pay back.
Creditors may have to stop
Once you’re bankrupt, the creditors it covers generally can’t collect those debts.
A set period
It usually lasts 12 months before discharge.
How it works
You talk to a debt adviser
They look at your situation, including whether bankruptcy fits and what else is open to you.
You apply
You apply online. An official decides whether to make the order.
Your assets may be dealt with
An official receiver takes charge. Valuable assets may be sold, and you may pay part of your income.
Discharge, usually after 12 months
Most debts in it could then be written off. Some restrictions and payments can carry on.
Weigh it up
What could help, and what to know first.
What could help
- Creditors it covers generally can’t collect.
- It can suit someone who owes much more than they could ever pay back.
What to weigh up
- Your home, car, savings and other valuable assets may be sold.
- You may pay part of your income for up to three years.
- There are limits on borrowing, some jobs and running a business.
- It’s on your credit file for years and on a public register.
- Some debts, like court fines, usually stay.
Is it right for you?
It could suit you if
- You owe more than you could ever pay back, and no other option fits.
- You have few assets, or you’re willing to see them used to pay creditors.
It may not be right if
- You own a home or other assets you want to keep.
- The restrictions could affect your job or a business.
- Another option could suit you better.
Other routes to compare
No one option suits everyone. People often compare these.
Debt Relief Order
For people on a low income with few assets
Individual Voluntary Arrangement
One affordable monthly payment, usually for five years
Debt Management Plan
One monthly payment shared between the people you owe
Questions people ask
Will I lose my home?
It’s possible. Your home, and the value in it, can be taken into account. It’s worth getting advice first.
How long does it last?
You’re usually discharged after 12 months. You may pay part of your income for longer, and the record stays on your credit file for years.
Does it affect my job?
It can. Some jobs have rules about bankruptcy. Check any that apply to you.
Free, impartial advice is available from MoneyHelper, StepChange and National Debtline. MoneyHelper
Want to talk it through?
Answer a few questions and an adviser from one of our partner debt firms can call you. There’s no obligation to go ahead.