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What is bankruptcy?

Bankruptcy is a formal debt solution available to individuals in England, Wales, and Northern Ireland (known as sequestration in Scotland). It is a legally binding process for resolving unmanageable debt when other solutions are not suitable. Bankruptcy provides relief by freezing debts and typically discharging them after 12 months if all requirements are met. You can apply to make yourself bankrupt or a creditor can petition for your bankruptcy.
Debt Relief Order (DRO) consultation

How do I apply for bankruptcy?

Trust Deed Protected Trust Deed overview

England and Wales:

  • Apply online via the government website.
  • Application fee: £130, deposit: £550 (£680 total)

Northern Ireland:

  • Apply to the court.
  • Court fee: £151, bankruptcy fee: £525, affidavit fee: £7 (£683 total).

Scotland:

  • Apply through the accountant in bankruptcy’s website.
  • Application fee: £150, or £50 for a Minimal Asset Process (MAP) bankruptcy if eligible.

Fees can be paid in instalments but must be settled in full before submitting your application.

The bankruptcy process

1. Seek advice:
Consult with a debt adviser to determine if bankruptcy is the right solution for you. Alternatives may be available.

2. Apply:
Submit your application and pay the fee.

3. Official Receiver/Trustee:
You’ll receive a letter from the Official Receiver or accountant in bankruptcy detailing next steps.

They will:
Freeze your accounts. Interview you and review your finances.
Decide on monthly payments and which assets will be sold.

4. Public Record:
Your bankruptcy details will be recorded on the Individual Insolvency Register (England, Wales, NI) or Register of Insolvencies (Scotland).

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What happens when bankruptcy ends?

After 12 months, you will typically be discharged from bankruptcy, and remaining debts will be written off.

If you have been paying into your bankruptcy, payments may continue for three years in England, Wales, and NI, or four years in Scotland. Failure to cooperate could delay your discharge.

Bankruptcy guidance for clients

Benefits

  • Includes most unsecured debts, with no upper limit.
  • Debts are discharged after 12 months, provided you comply with the process.
  • Creditors cannot take further action against you.
  • Application fees can be paid in instalments.
  • Often the quickest and most effective way to resolve unmanageable debt.

Considerations

  • Your credit rating will be significantly impacted for six years.
  • Details are listed on a public insolvency register.
  • Assets, such as your home or vehicle, may be sold.
  • Bankruptcy costs £680 (£683 in Northern Ireland, £150 in Scotland).
  • Employment in certain professions may be affected.
Submitting income and expenditure online

Faqs

The cost is £680 in England and Wales, £683 in Northern Ireland, and £150 (£50 for MAP) in Scotland. Fees can be paid in instalments.
No, creditors cannot take further action once bankruptcy has been declared.
Potentially, if they are deemed assets of significant value. Essential items and some vehicles may be exempt.
Bankruptcy will remain on your credit file for six years, significantly impacting your ability to borrow.
Most unsecured debts, such as credit cards, personal loans, and utility arrears. Certain debts like court fines and student loans cannot be included.
Bankruptcy usually lasts 12 months, but payments into the bankruptcy can continue for three to four years depending on your location.
Yes, but you may face restrictions in certain professions. Check your employment contract.
You must inform your Trustee, who may adjust your repayment obligations.

How can Debt Free Associates Limited help?

Our knowledgeable team can assess the best option for you and connect you with trusted partners who can administer the arrangement. Contact us today or use our live chat for immediate assistance.
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