How long does bankruptcy take?

Applying for bankruptcy can feel like a lengthy process, so it’s a good idea to have in mind how long you’ll be expecting to wait before anything is put in place.

How long does bankruptcy normally take to complete?

It takes 12 months for bankruptcy to be completed and for you to be discharged. Your bankruptcy will also be listed on your credit report for six years, from the date it was created.

However, as well as understanding exactly what happens when you declare bankruptcy, it’s important to be aware of how the bankruptcy process works and how long it normally lasts for. It is a decision that should only be carried out after looking into all other debt solutions.  

In this guide, we’ve broken down how long a bankruptcy can take to process and complete – plus what you need to do at each stage.

Bear in mind before applying that it costs £680 to apply for bankruptcy – we have more details about what these fees are used for here – so it is not a cheap debt solution. In Northern Ireland the application fee is a little cheaper, costing £659.

1. First step: Fill out the bankruptcy form and pay the fee

You can apply for bankruptcy yourself via the Gov.uk website, with no need to go to court. You can take as long as you like filling this out, saving your progress as you go along and coming back to it later.

This fee can be paid online, either upfront in full or via instalments to spread the cost. We understand the likelihood of being able to pay it upfront is low if you are applying for bankruptcy, and many people opt to pay in instalments.

You can also pay in cash, but please be aware if you wish to pay this way, then the whole £680 will need to be paid up front. The fee must be paid in full before you can be made bankrupt.

2. Next, submit your bankruptcy form

Once you have filled in the form, you will be asked to confirm a few details. It’s very important you check these are correct before submitting the application. You will be asked if:

• You agree to a credit check being performed on you.
• All the information you have provided on the form is accurate.
• You are the named person on the application.
  

If it is later discovered you lied or provided false information knowingly – which is a bankruptcy offence – the restrictions placed upon you during the bankruptcy process can be extended for up to 15 years. You also risk being fined and even sent to prison in some cases.

Check the form very carefully, ask someone you trust to help you or seek the advice of a financial expert.

3. Up to 28 days after submitting your application – a decision will be made

Your application will be sent to an adjudicator – this is someone who makes a final decision on legal issues such as bankruptcies.

They have 28 days to make a decision and will review your form before deciding whether to grant your bankruptcy – or reject it.

If the adjudicator needs more information they will contact you for this – they then have another 14 days to review this information to make a decision.

4. Immediately after bankruptcy has been approved

The bankruptcy order will then be set up and your bank accounts may be frozen because the Official Receiver takes control of it, while reviewing your finances.

It’s a good idea to withdraw enough money, so that you can pay for anything you need while this process is being carried out – such as groceries, fuel and household bills.

5. Two weeks after the bankruptcy order is made

The Official Receiver will get in touch to discuss your bankruptcy. This is usually through a telephone call. It’s unlikely the official receiver will ask to meet in person. The Official Receiver is there to help the bankruptcy process run as smoothly as possible and deals with all legalities and creditors on your behalf.

It’s important you work with the Official Receiver and help them with any requests they may have for information. They may need further detail about something on your application form or ask you to present something as proof.

You could also now look into setting up a basic bank account – as yours may still be affected by the Official Receiver investigating your finances. This will need to be a standard type of account, with no overdraft, because you won’t be able to apply for credit. This is simply so you can have your wages or benefits paid electronically and still pay any bills.

6. 12 months from the date the bankruptcy was created, you will be discharged

If you work with with your official receiver and do not break any of the restrictions placed upon you – click here to read more about these – you will be discharged from your bankruptcy, 12 months after it was put in place. This means your debts will be wiped and your assets used to pay off a large portion of them.

Think about accommodation

Your home may need to be sold, which means once you are discharged you may need to move out. It’s important you have the support of friends and family at this time. Alternatively, if you are at risk of becoming homeless after bankruptcy, you can speak to your local council. They may be able to see if you are eligible for re-housing.

7. Getting proof of your bankruptcy being discharged

It’s a good idea to keep any proof of your bankruptcy completion safe, just in case you need to provide evidence in the future. In some cases, the bankruptcy is automatically discharged and you won’t receive any official notification.

Once the date has passed, you may need to ask for a Confirmation of Discharge. This is proof that your bankruptcy has been completed and you are free from the restrictions. You can contact the Official Receiver for a free confirmation letter.

8. Three months after the bankruptcy has been discharged

After three months, your bankruptcy listing will be removed from the insolvency register – we have more information about what this register is here. Keep an eye on this and check it is removed at the right time.

Once you have been discharged, it’s a case of getting your finances in check and waiting for your credit rating to recover, ready for the future when you may need to borrow money again.

During your bankruptcy and once you are discharged it’s important you have a support network who can offer advice, a safe place to talk or just a friendly face. This could be a family member or a close friend. If they are able to, seek their advice or ask them to check any forms you are filling out to ensure you haven’t missed anything and understand what you are signing up to.

For now, our team at PayPlan are on hand should you have any further questions about how long bankruptcy takes or about your debts in general. Call on 0800 316 1833 or fill out our contact form to get in touch.