Bankruptcy in the UK — What You Need to Know
Bankruptcy can feel like the end of the world, but it's actually a legal process designed to give people a fresh start. Most restrictions last only 12 months, and millions of people rebuild their finances successfully after bankruptcy.
How Bankruptcy Works
- 1You apply online through the Insolvency Service (costs £680)
- 2An Official Receiver reviews your assets and finances
- 3Most bankruptcy restrictions end after 12 months
- 4After discharge, most debts are written off completely
What Happens to Your Assets
- Home: May need to be sold or your share realised (you have up to 3 years)
- Car: May be kept if needed for work and not high value
- Savings: Anything above reasonable amount goes to creditors
- Income: Payments may be required if you earn above a threshold
- Pension: Protected and cannot be taken
What You Cannot Do During Bankruptcy
- Act as a company director
- Get credit over £500 without disclosing bankruptcy
- Manage a business under a different name
- Act as a school governor or certain public roles
Debts NOT Written Off
- Student loans
- Court fines
- Child maintenance
- Debts from fraud
- Some benefit overpayments
Life After Bankruptcy
After 12 months, most restrictions end. Many people:
- Rebuild credit within 2–3 years
- Get a mortgage within 3–6 years after discharge
- Start new businesses successfully
The bankruptcy stays on your credit file for 6 years from the date of the order.
Frequently Asked Questions
Will everyone know I'm bankrupt?
Bankruptcy is listed on the public Insolvency Register, but it's very unlikely anyone would search for you there. Your employer is not notified unless you hold a role that requires disclosure (e.g., financial services).
Can I open a bank account while bankrupt?
Yes. Some banks are more accommodating than others. Basic bank accounts are available to anyone, including people who are bankrupt.
What if I can't afford the £680 fee?
You may be able to pay in instalments. Some charitable organisations can also help with the fee. Contact your local Citizens Advice for guidance.
Related Guides
Debt Relief Order (DRO) — Full Guide
What is a DRO, who qualifies, and how to apply. Free guide covering eligibility, costs, restrictions, and what happens after 12 months.
Individual Voluntary Arrangement (IVA) — What You Need to Know
Complete guide to IVAs in the UK. How they work, costs, pros and cons, and whether an IVA is right for your debt situation.
Sources & Further Reading
Get a free recovery plan by email
We'll send you a personalised action plan with next steps, plus practical tips over the following week.