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FAQs

Bankruptcy

Our FAQs answer the most common questions about how Bankruptcy work so you can decide with confidence whether this solution is right for you.

Who informs my creditors of my bankruptcy?
Once approved for bankruptcy, you will stop dealing with the creditors included in your bankruptcy, and making payments, and they will be unable to take any legal action against you. You will be assigned a Trustee to contact the creditors during your bankruptcy on your behalf.
Can I continue to apply for credit while I am bankrupt?
It is illegal to apply for £500 or more of credit while you are bankrupt without informing the lender that you are bankrupt. In any case, most creditors would run a credit check on you and discover the note on your credit file, which lasts for six years following the date you filed for bankruptcy. We would, therefore, not recommend applying for credit until your file is clear as if you’re refused credit, this can have an additional negative effect on your credit rating.
Can I cancel bankruptcy?

You can cancel bankruptcy, which would lift the restrictions on you and the impact on your credit rating sooner, but you can only do this if one of the following reasons applies:

  • All of your debts and fees for your bankruptcy have been paid in full by either you or a third party.
  • You’ve set up an Individual Voluntary Arrangement (IVA) instead.
  • The bankruptcy was set up in error.
How long will my bankruptcy last?

Bankruptcy will normally last for 12 months, after which time your debts are written off at the end of bankruptcy. If you have a surplus income of more than £20 a month, you may also be required to pay into the bankruptcy for up to three years.

You won’t be required to make a payment from your income if you are just in receipt of state benefits.

How much does it cost to file for bankruptcy?
There is a £680 fee to file for bankruptcy, but you may be able to get support to pay this through a charity or a grant, should you meet the criteria. This fee can be paid in instalments but bankruptcy proceedings can’t start until it is paid in full.
Can debts be added after you’ve gone bankrupt?
Any unsecured debt that can be included in bankruptcy that you are liable for or may become liable for on the date you are declared bankrupt is included. This means that if you forget about a debt or are unaware of one that comes to light later on, they’re still included. Any requests for payment from the creditor can be referred to the Official Receiver.
Which debts can’t be included in bankruptcy?
Secured debts are not normally included in bankruptcy, such as a mortgage or hire purchase on a car. Student loans, fines and penalties, debts arising from family proceedings such as maintenance orders, budgeting loans and crisis loans owed to the Social Fund are all excluded from bankruptcy.
Are CCJ debts included in bankruptcy?
If you have a CCJ (County Court Judgment), this debt is included if you go bankrupt. The judgment is written off the same way as any other unsecured debt and is the same for an Attachment of Earnings. However, if a charging order has already been issued against your property, the debt will be secured, which means it cannot be included and will still have to be paid.
Which debts can be included in bankruptcy?

Most of your unsecured debts, such as credit cards, personal loans, payday loans, guarantor loans, catalogue debts, store cards and overdrafts, can all be included in the bankruptcy. Additionally, HMRC Tax or VAT debts for which you are personally responsible, council tax arrears, utility bill arrears, gambling debts, outstanding balances after home or vehicle repossession, benefits overpayments and business loans for which you are personally responsible can also be included in bankruptcy.

Will bankruptcy affect my ability to get a mortgage?

Yes. Bankruptcy stays on your credit file for six years and can make getting a mortgage more difficult. Some lenders may also ask if you’ve ever been bankrupt, even after it drops off your credit record. You may need to wait, rebuild your credit or save a larger deposit to improve your chances.