Bankruptcy
A long-established way to deal with serious debt — most unsecured debts are written off, usually within 12 months.
See if you qualifyBankruptcy is a solution for people facing serious debt problems with little or no disposable income to repay creditors. It’s often seen as a last resort, but it can give a fresh start where other solutions aren’t suitable. Our team will discuss whether it’s right for you.
What happens when you become bankrupt?
Most, if not all, of your unsecured debts are written off, leaving only debts that can’t be included (such as secured debts, student loans and some benefit overpayments). Bill and debt collectors must stop chasing you for debts included in the bankruptcy. Most people’s jobs aren’t affected, though some roles can be — check your employment contract if you’re unsure.
The steps to bankruptcy
You apply online via the Insolvency Service on GOV.UK, including details of your debts, income and expenditure. There’s a fee of £680, which can be paid in instalments. An adjudicator considers your application and, if appropriate, makes the bankruptcy order. You’re usually discharged within 12 months.
Key facts about bankruptcy
There are restrictions: you can’t act as a company director or borrow more than £500 without disclosing your bankruptcy, and if you have equity in your home it may be sold. Your credit rating will be seriously affected for six years.
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Free, independent debt advice is also available from MoneyHelper, StepChange, National Debtline and Citizens Advice.