Bankruptcy at a glance

Bankruptcy Benefits

Bankruptcy Drawbacks

A quick solution if you have large debts that would take you many years to pay off through another debt solution or if you have no funds to repay your debts.

Once bankrupt, you are no longer in control of your assets. A Trustee will be appointed to go through your finances, assets and debts, and investigate the cause of your bankruptcy. The rights for and interest in your assets transfers to the Trustee, too.

Lasts just a year, allowing you to make a fresh start after 12 months. However, If your income is deemed high enough you may have to make an income payment for up to three years.

Any assets deemed to be of excessive value are likely to be sold in order to pay your creditors. These could include your house or other property, motor vehicles, personal items or other household items that are considered ‘non-essential’.

Remember, assets such as your house or car will only be deemed to be non-essential if they’re worth an excessive amount (like a BMW or a £500,000 house) and won’t be repossessed if they leave you homeless or unable to work.

All debts within the bankruptcy will be written off at the end of the 12-month period.

If you have a surplus income of £20 or more a month, you may be expected to pay this surplus into the bankruptcy for up to three years.

Creditors will stop chasing you and liaise with the trustee (who will be either the official receiver or, if the court appoints one, a private insolvency practitioner) on your behalf.

Bankruptcy prevents you practicing in some professions, and can affect others, so be sure to check your employment contract.

Creditors can’t take further action against you, unless the debts are secured against your assets, such as your home or any vehicles owned by you.

Bankruptcy has an impact on your credit rating for six years from the date the bankruptcy order is made.

You are permitted to keep essential items needed to satisfy basic domestic needs and for work, providing they are not of excessive value.

If you run a business, it will almost certainly be closed down, and if you have any employees, they will be dismissed and value in stock and business will be sold.


Obtaining credit of £500 or more without disclosing you are bankrupt is an offence.


While you are bankrupt, you can’t act as a director of a company unless you have received the court’s permission, and there are other restrictions around doing business, too.


Anybody who has information about your assets could be publicly examined in court if the Trustee believes this will aid the investigation.


Notice of your bankruptcy will be advertised in the London Gazette and possibly your local paper.


While you are bankrupt and for three months after you are discharged, your details are displayed on the Individual Insolvency Register, which is a public database.


Pension payments, including lump sums drawn down, are not excluded from consideration within your bankruptcy as income.


If you have joint debts, for example with a partner, creditors will look to your partner to pay any joint debts in full and your bankruptcy could affect their credit score.


You will still be liable for certain debts.


Bankruptcy can affect your immigration status.

Our friendly, expert advisers can help you start to take control of your debt, and can advise you on alternative options to bankruptcy. Call FREE on 0808 278 3071 and they will help you decide which solution is best for you, guide you through the process step by step and answer any questions you may have.

We are available from 8am to 8pm Monday to Friday, and 9am to 3pm on Saturday. Alternatively, complete an enquiry form and one of our team will be in touch as soon as possible.

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