Bankruptcy Help & Advice - Applying to Become Bankrupt in UK (2024)

FAQs

Bankruptcy Help & Advice - Applying to Become Bankrupt in UK? ›

You can apply to make yourself bankrupt if you cannot pay your debts. Check if there are other ways you can deal with your debts before you apply for bankruptcy. Your application will be looked at by someone who works for the Insolvency Service called an 'adjudicator'. They'll decide if you should be made bankrupt.

To apply to go bankrupt you need to fill in an online application. You or someone helping you can fill in the form on the GOV.UK website. You can save and come back to it later if you need to. You will need to pay a total fee of £680 to apply to go bankrupt.

You may lose all of your high-value assets, your business, and your reputation will be negatively affected for years to come. Your family and friends could suffer through the long process, too. Here are the major cons of filing bankruptcy: For 12 months, you're legally classed as an undischarged bankrupt.

Bankruptcy applications are processed by the UK's dedicated Insolvency Service, and the reality is that very few bankruptcies are denied. It's estimated that as little as one per cent of bankruptcy applications in the UK are denied by the Insolvency Service each year.

You can declare yourself bankrupt in England or Wales if you live outside the UK, provided you lived in England or Wales or have had a business there at some point in the last three years. The Bankruptcy Order made in England and Wales may not be recognised in other countries outside the UK.

You'll usually get an email or letter from the adjudicator within 28 days of submitting your application to say if you've been made bankrupt. This can take longer if the adjudicator needs to ask more questions about your application. They'll then issue a bankruptcy order.

Debt Relief and Fresh Start

One of the primary benefits of bankruptcy is the debt relief it provides. After the bankruptcy process, most, if not all, unsecured debts are discharged, allowing the debtor to start their financial life anew.

Bankruptcy frees you from debt collection, but the headaches can linger for years. Debt settlement without bankruptcy can take more time but — if negotiated properly — can do less damage to your credit. Debt settlement stays on your credit report for seven years, but has less negative impact on your credit score.

Most people can keep household furnishings, a retirement account, and some equity in a house and car in bankruptcy. But you might lose unnecessary luxury items, like your fishing boat or a flashy car, or have to pay to keep them.

How do bankruptcies work in the UK? ›

Bankruptcy is a legal status that usually lasts for a year and can be a way to clear debts you can't pay. When you're bankrupt, your non-essential assets (property and what you own) and excess income are used to pay off your creditors (people you owe money to). At the end of the bankruptcy, most debts are cancelled.

Bankruptcy is a legal process or court order, while insolvency is a state of financial distress. Bankruptcy is a type of insolvency, but there are others. Bankruptcy isn't the only way out of insolvency. Bankruptcy applies only to individuals and sole traders with unlimited liability.

if you want your credit record to show you've been discharged, you should send confirmation to each of the credit reference agencies and ask them to update your file - remember the bankruptcy will show on your file for 6 years after the bankruptcy order.

For most debts, the time limit is 6 years since you last wrote to them or made a payment. The time limit is longer for mortgage debts. If your home is repossessed and you still owe money on your mortgage, the time limit is 6 years for the interest on the mortgage and 12 years on the main amount.

you'll receive a copy of the bankruptcy order and may be interviewed about your situation. your assets can be used to pay your debts. you'll have to follow the bankruptcy restrictions. your name and details will be published in the Individual Insolvency Register.

What does life after bankruptcy look like? You'll have to endure hardships — from cash flow management to establishing good credit and rebuilding your credit profile — but it's possible to financially recover from bankruptcy and give yourself a fresh start.

When you are bankrupt: You must provide details of your debts, income and assets to your trustee. Your trustee notifies your creditors that you're bankrupt - this prevents most creditors from contacting you about your debt. Your trustee can sell certain assets to help pay your debts.

You can search for details of people who have gone bankrupt or signed an agreement to deal with their debts in England and Wales. You can also check the disqualified directors register to find out if someone has been disqualified from being a company director.

Being in an IVA and living overseas does not stop you from filing for bankruptcy. An IVA agreement is an official agreement between you and your creditors. For this reason the IVA needs to default before you can file for bankruptcy.

You can apply for a Debt Relief Order or Bankruptcy Order if you cannot pay your debts because you do not have enough money or assets you can sell. If you cannot pay off your debts, you can be made bankrupt.