You can get help from a debt adviser and may need to apply to make yourself bankrupt if you are unable to find another way of dealing with your debts.
This section explains the process of applying to become bankrupt in England and Wales and what can happen to your assets (e.g. your home).
People known as 'adjudicators' work with the Insolvency Service and oversee any applications for bankruptcy.
So, a primary role of an adjudicator is deciding whether you (as an individual) should be making yourself bankrupt.
But, the process differs if you are 'being made bankrupt' by someone else (e.g. you failed to pay a debt over £5,000).
Note: Another section explains how to apply for bankruptcy online in England or Wales and the current costs for doing so.
After considering the application, the adjudicator may decide to make you bankrupt or set up an interview. Next, you will get a copy of the bankruptcy order, and:
You can search the bankruptcy and insolvency register to check for people who have gone bankrupt or for those who have signed an agreement to deal with their debts (England and Wales). The section below explains how to remove your address from the Individual Insolvency Register (e.g. if it would put you at risk of violence).
As a rule, it takes twelve (12) months to be discharged (released) from the debts and any associated bankruptcy restrictions. But, they can still use certain assets owned during the bankruptcy period to pay off a debt.
Note: The Insolvency Service produces further guidance about options when a company is insolvent (e.g. when limited companies are unable to pay their creditors).
When you apply to make yourself bankrupt your name and address will be published in the Individual Insolvency Register and in the London Gazette.
In some cases, having an address published may put you at an increased risk of violence. If so, you can ask the court to issue a PARV order (e.g. to avoid having it available to the public).
Important: Even though they still publish your name, you must have already started the bankruptcy application process.
You must use rule 20.5 bankruptcy application if you want to apply for an order for non-disclosure of a current address. Fill in the form and deliver it at the nearest court that deals with bankruptcy (there may be a fee).
Following that, the court will provide further details on how to attend a hearing to present your application to a judge. You should get the judge's decision on the same day.
The adjudicator will send you an email or a written letter to confirm whether you have been made bankrupt - or not. In most cases, you should know within twenty eight (28) days of submitting the application.
Following that, the adjudicator issues a bankruptcy order (unless they need to ask more questions or get further information about your application).
The official receiver (e.g. officer of the court) will then send you a letter and an information pack within two (2) weeks. They might also ask you to:
If you contact an official receiver, they may conduct an interview over the telephone or in person (face to face), for the purpose of:
Note: Failing to provide the details and information that they ask for may delay the discharge from bankruptcy (release).
After applying to become bankrupt in England or Wales, you must follow the rules of bankruptcy. The restrictions mean you must provide any information required and you will not be able to:
Because breaking a bankruptcy restriction order is a criminal offence, you can be prosecuted for doing so.
The official receiver can extend the restrictions through a bankruptcy restrictions order. They will be extended if you fail to (either):
They may use Bankruptcy Restrictions Orders and Undertakings to get an agreement from you - if they want to extend them.
Note: You can report misconduct by someone who is bankrupt to the official receiver or the Insolvency Service if they are working as a company director 'illegally'.
Some items of value can be sold off to pay off bankruptcy debts. So, you would need to hand over your assets to the trustee (e.g. the person appointed to manage the bankruptcy).
As a rule, the official receiver (e.g. officer of the court) will act as a trustee in the beginning. But, the role might also pass over to an insolvency practitioner (e.g. an authorised debt specialist).
The assets that you can keep after making yourself bankrupt (unless they are valued higher than a reasonable replacement), include:
The official receiver will ask you to hand over bank cards, cheque books, and credit cards for accounts that are banned from use (including any overdrawn accounts at the bankruptcy date).
Even though they will freeze your accounts, the trustee has the power to release:
The relevant bank or building society will decide whether to freeze your accounts or allow you to continue using them.
You should be able to retain money you put into a pension. Even so, pension payments made to someone while they are bankrupt will usually count as 'income'.
Note: The Insolvency service produces a Guide to Bankruptcy that explains more about what will happen when you have been made bankrupt.
Your equity is the share that you have left after any paying off any secured debts (e.g. a mortgage). This is the amount that determines whether they will sell your home after you make yourself bankrupt.
Hence, you may need to relinquish (give up) your equity as well as your legal ownership of the property that you own if your equity is £1,000 or more.
But, ownership of the property will be transferred back to you if the trustee has not tried to sell your home within three (3) years.
As the sole owner, because the equity and legal ownership will be transferred to your trustee, they will not allow you to sell the property (or claim any money from selling it).
Furthermore, they will confirm this through a placement of a bankruptcy restriction or notice being added to the entry in the land register.
You will not be able to remove it unless they added it as an error. You can correct a mistake by sending a signed statement to HM Land Registry that you are not bankrupt (e.g. using the application to change the register (AP1) for properties).
If there are joint owners the equity will be transferred to the trustee and they will add a 'Form J restriction' to the property's entry in the land register.
Simply put, doing so means the trustee will be notified about any dealings connected with the property (e.g. if you put it up for sale).
You would need to prove that you (as the person who is made bankrupt) does not have any share in the property (e.g. your partner owns it) to have it removed.
The owner would need to send a signed statement to HM Land Registry stating they are not the bankrupt person along with registration (RX3) - which is an application for the cancellation of a Form J restriction.
It may be possible to delay, or completely stop, the sale of your home, such as if your equity is valued less than £1,000, or:
Even though you may be able to get legal aid, it may be best to get legal advice about stopping the sale of your property after becoming bankrupt.
As a rule, your landlord will be notified about your bankruptcy if you are renting. Thus, it may affect your rental situation.
If you can afford to do so, the trustee may tell you that you need to make monthly payments from any of your 'spare' income (including pension payments). An Income Payments Agreement (IPA) can last for a period of up to three (3) years.
The trustee can ask a court to issue an Income Payments Order (IPO) if you disagree with the details set out in the IPA - and charge you for doing so.
As a general rule, the monthly amount you would pay is calculated after deducting your essential expenses (e.g. food and utility bills).
You may have valid grounds for canceling your bankruptcy (through an annulment order) if they should not have made the bankruptcy order, or:
What if your circumstances change and you have an opportunity to pay off all the debts? If so, to avoid following the bankruptcy restrictions, you would need to pay it through the official receiver or through a solicitor.
To apply, you must follow the proper steps for insolvency issues and use ('application notice IAA'). Fill in the form and send it (or hand deliver it) to your nearest court that handles bankruptcies. You can also notify the court to have details about the bankruptcy removed from the Land Charges register.
You would need to attend a court hearing about your application and you may also need to attend an interview with the official receiver.
The official receiver can advertise an annulment order within twenty eight (28) days of you getting it. They will advertise the annulment order wherever the bankruptcy order got issued.
Bankruptcies end, along with any associated restrictions, once you get 'discharged'. The ending of bankruptcies is usually an 'automatic' process.
As a rule, bankruptcy ends twelve (12) months from the date that the adjudicator made you bankrupt. However, failing to co-operate with the trustee can extend the process. The Individual Insolvency Register allows you to check a discharge date online.
Important: Canceling a bankruptcy will end all restrictions with immediate effect and remove your details from the Individual Insolvency Register.
You can email the Insolvency Service to get a free proof of discharge. Ask them to give you a 'confirmation letter' so you can prove your bankruptcy has ended.
You may also need to get a Certificate of Discharge if you are applying for a mortgage. The way you applied for bankruptcy will determine how to get it, such as:
They will update the Individual Insolvency Register within three (3) months of a discharge. But, you would need to apply to Land Charges as well as HM Land Registry to have a bankruptcy entry removed from any properties that you still own (after you paid off your debts).
They remove bankruptcy entries from the Land Charges register by automatic process after five (5) years.
You must use application form K11 to cancel an entry in the Land Charges Register. Remember to include a copy of the court order that allows the 'vacation' of the entry and the payment for each entry that you want to cancel.
Land Charges Department
2 William Prance Road
HM Land Registry Bankruptcy Unit
2 William Prance Road
They will destroy all forms after they update the bankruptcy registers. Write "I certify that this is a true copy of the original" next to your signature if you are using copies.
Credit reference agencies get information about the ending of bankruptcies from public records. But, you can get a copy of your credit reference report from the Information Commissioner's Office (ICO).
Bankruptcies can stay on a credit reference file for up to six (6) years from the date of the bankruptcy.
You will get released from most of the debts when you get discharged. But, they will not release you from debts that occur from fraud, or:
Note: This short video presented by The Insolvency Service explains what happens after a bankruptcy order is made in England and Wales.
How to Apply for Bankruptcy in the United Kingdom