Applying to become bankrupt

There are other options for dealing with your debts that do not restrict what you can do as much as bankruptcy does. Before you apply to become bankrupt, find out about other options for dealing with your debts . How to apply You can only apply online. Your address will be publicly available if you’re made bankrupt. If this will put you at risk of violence, you’ll need to apply for a ‘person at risk of violence’ order before submitting your application. Apply for bankruptcy . It costs £680. If you’re struggling to pay the fee, a charity may be able to help. Find out where to get free debt advice . The process to become bankrupt is different if you live in Scotland or live in Northern Ireland . After you’ve applied Someone who works for the Insolvency Service (called an ‘adjudicator’) will check if your application meets the requirements for bankruptcy. They’ll see if any other money could be used to pay your debts instead, for example your pension or savings. If you have access to other money and it covers your debts, the adjudicator might refuse to make you bankrupt. If the adjudicator decides you can be made bankrupt, they’ll accept your application and issue a bankruptcy order. They’ll then pass your case on to an ‘official receiver’ who’ll deal with your bankruptcy. Your name will be added to the Land Charges register - lenders can search this register if you apply for a mortgage. If you’re the sole owner of a property, HM Land Registry will add an entry to the register it holds for your property. This might mean you cannot sell your property. Find out what happens after you’ve become bankrupt . How long it takes You’ll get an email or letter from the adjudicator within 28 days of submitting your application confirming whether you’ve been made bankrupt. It can take longer if they need to ask you more questions. If you’ve changed your gender or name If you’ve changed your gender or name, you might have to include this on your bankruptcy application. The official receiver might need to tell other people your previous name if: they need to do that to protect or recover the things you own it will help people or organisations identify what you owe them

If someone's applying to make you bankrupt

Someone you owe money to can apply to a court to make you bankrupt if you: do not pay your debts and you owe £5,000 or more break the terms of an Individual Voluntary Arrangement The process to become bankrupt is different if you live in Scotland or live in Northern Ireland . Before you’re made bankrupt Before you can be made bankrupt, the people or organisations you owe money to have to try other legal ways to get you to pay your debt. This is usually through a statutory demand or a court judgment. Citizens Advice has guidance on what to do if you’re sent a statutory demand. You can challenge a statutory demand if you disagree with it. Find out about other options for dealing with your debts . When someone applies to make you bankrupt The person who wants to make you bankrupt sends an application to the court, called a ‘bankruptcy petition’. They’ll also give you a copy in person or post it to you. The court sets a hearing date, at least 14 days after the person gave you the petition. If the court makes you bankrupt at the hearing, they’ll send a bankruptcy order to the ‘official receiver’, who’ll deal with your bankruptcy. Public records when a bankruptcy petition is filed against you Your name will be added to the Land Charges register - lenders can search this register if you apply for a mortgage. If you’re the sole owner of a property, HM Land Registry will add an entry to the register it holds for your property. This might mean you cannot sell your property. Your address will be publicly available if you’re made bankrupt. If this will put you at risk of violence, you’ll need to apply for a PARV order before your bankruptcy court hearing. At the court hearing You can go to the court hearing. The court can: make a bankruptcy order, which means you become bankrupt pause the petition (this is called ‘staying’ the petition) dismiss the petition postpone (or ‘adjourn’) the hearing If you’re being made bankrupt, you can get free debt advice . If you do not want to be made bankrupt You can oppose a bankruptcy petition if you do not agree with it. You must do this at least 5 days before your bankruptcy hearing. You do not have to pay a court fee to oppose a bankruptcy petition but you might have to pay costs if you’re not successful. You can hire a solicitor to help. Check whether you’re eligible for legal aid . Download and fill in form Bank 6 to oppose a bankruptcy petition. Send the form to the court that sent you the bankruptcy petition. If it was the High Court Insolvency and Companies List, you can submit the form online . If it was a different court you’ll need to submit the form by post. Find the address of the court that sent you the petition. If you successfully oppose a bankruptcy petition, you must apply to both Land Charges and HM Land Registry to have your bankruptcy entry removed from their registers. Apply to Land Charges Send an application to cancel an entry in the Land Register (K11) to the Land Charges department. You need to include: a copy of your court order permitting the cancellation (or ‘vacation’) of the entry the correct fee for each entry you want to cancel The address is on the application form. Check how much it costs to submit a Land Charges application . Apply to HM Land Registry You need to send HM Land Registry either: an application to change the register for a property , if you’re the sole owner of your property an application for the cancellation of a Form J restriction , if you own your property with someone else You must include a copy of your court order. The address to send it to is on the application forms. Your documents will not be returned once the registers are updated. You can send copies if you write “I certify that this is a true copy of the original” and sign the document on the first page. After you’ve been made bankrupt You’ll receive a bankruptcy order. Find out what else happens after you’ve become bankrupt . You may be able to cancel your bankruptcy and stop it being published. If you’ve changed your gender or name If someone else has made a bankruptcy petition against you but not noted your gender change, you must tell the person dealing with your bankruptcy (the ‘official receiver’).

If you're at risk of violence

When you’re made bankrupt, your name and address will be published in: the Individual Insolvency Register the Gazette If having your address published will put you at risk of violence, you can apply to the court for a person at risk of violence ( PARV ) order. Your name will still be published, but your address will not be. If you start an application for a PARV order after you’ve been made bankrupt, your address may be published. Apply for a PARV order Download and fill in the form to apply for a PARV order . If you’re applying to become bankrupt yourself Apply for a PARV order after you’ve started a bankruptcy application but before you submit it. You’ll need to include your bankruptcy application reference number in your PARV application. Take your completed form to your nearest court that deals with bankruptcy. They’ll tell you if you need to pay a fee to apply. Find a court that deals with bankruptcy. Find out if you can get help with court fees . You’ll have to go to a hearing to explain to a judge why you need to stop your address being published - the court will tell you when and where this will take place. You’ll usually get a decision on the same day. If someone is applying to make you bankrupt Apply for a PARV order after the person has applied to the court and you’ve received a ‘bankruptcy petition’ but before the bankruptcy hearing. You’ll need to include the court’s bankruptcy reference number in your PARV application. The court will consider the PARV order at your bankruptcy hearing. You’ll have to go to it and explain to a judge why you need to stop your address being published. The court will tell you when and where this will take place. You’ll usually get a decision on the same day. Find out if you can get help with court fees . If you’ve already been made bankrupt Before your address is published, apply for an urgent court hearing to ask the judge for an order called a ‘stay of advertisement’. This stops your details from being published temporarily to give you time to apply for a PARV order. Apply for a ‘stay of advertisement’ to the court that made you bankrupt. If you applied for bankruptcy yourself, find a court that deals with bankruptcy. You’ll need to tell the person dealing with your your bankruptcy immediately that you’re doing this (called the ‘official receiver’). If your address has already been published Contact the official receiver and tell them you’ve applied for a PARV order (or are going to). Once you have a PARV order it may be possible to remove your address.

After you've become bankrupt

You’ll receive a copy of the bankruptcy order. Your name and address will be published in the Gazette and the Individual Insolvency Register . You’ll usually hear from the person dealing with your bankruptcy (the ‘official receiver’) within 2 weeks of getting your bankruptcy order. You’ll get information about what you must do. People who’ll deal with your bankruptcy The official receiver will usually deal with your bankruptcy from start to finish. They’ll also be known as the ‘trustee’. Sometimes, the people and organisations you owe money to can ask for a different trustee to take over dealing with your bankruptcy from the official receiver. You’ll be told if this happens. You’ll still need to give information to the official receiver if they ask you to. What you must do When the official receiver or trustee asks you, you must give them any information they ask you for. This can include: information about your finances, including any money you are owed a list of everything valuable you own You must tell the official receiver or trustee immediately if: you’re running a business the things you own need protecting - for example because other people might claim them, or they’re at risk of damage or theft the things you own need to be made safe to protect others - for example a building you own is unsafe or you have hazardous substances You must tell the official receiver or trustee about any change to your income or possessions during your bankruptcy, for example if you find out you’re coming into an inheritance. If you do not give the official receiver or trustee the information they ask for They can: ask you to go to court to explain why ask the court to delay the end of your bankruptcy so it lasts longer What the official receiver does They’ll: check the information you give them about your debts, your finances and the things you own answer your questions about the bankruptcy process, if they can The official receiver might want to interview you. If they do, the interview could take place over the phone, by video call or in person. They might: ask for more details, for example about your vehicles and bank accounts ask how and why you became bankrupt The official receiver will send a report to the people and organisations you owe money to, including details of the things you own and your debts. This usually takes 4 weeks but can take up to 12. While you’re bankrupt There are some things you will not be able to do . If your possessions are valuable, the trustee may sell them. This can include selling your home but only if you have equity in it. The trustee will decide how much spare income you have. This will depend on how much of it you need to live on. The trustee will use your spare income and the money from selling your valuable possessions to pay for your bankruptcy and to make payments towards your debts. Find out what happens to your money and income if you’re made bankrupt.

When you’re bankrupt, you cannot: borrow more than £500 without telling the lender you’re bankrupt act as a director of a company without the court’s permission create, manage or promote a limited company without the court’s permission run a business without giving your name when you were made bankrupt to the people you do business with - as well as any business name you used You might be prosecuted if you break the restrictions. How long the restrictions last Restrictions last until your bankruptcy ends or you successfully apply to cancel your bankruptcy . When the restrictions can be extended The person dealing with your bankruptcy (the ‘official receiver’) can get the time that you’re under these restrictions for extended if they believe you’ve acted carelessly or dishonestly. They’ll ask you to agree to a bankruptcy restrictions undertaking to extend the restrictions. If you do not agree, they’ll ask the court to make a bankruptcy restrictions order.

The person dealing with your bankruptcy (the ‘trustee’) might sell your family home, depending on how much equity would be left after any secured debts (like a mortgage) were paid. If your equity is more than £1,000, the trustee can either: sell the property apply for a ‘charging order’ - this fixes the amount the trustee will get from the property if you sell it later on If the trustee has not started to deal with your family home within 3 years it will usually be transferred back to you. If you’re the sole owner The legal ownership of your home is transferred to the trustee, along with any equity. A bankruptcy restriction is added to your property’s entry in the land register to say this. You will not be able to sell your home. If you own the property with someone else Any equity you have in the property will be transferred to the trustee. You’ll still own the property with the other person or people who are joint owners. A ‘Form J restriction’ is added to your property’s entry in the land register. This means the trustee will be told of any dealings connected with your home, for example if you try to sell it. It can be removed if you can prove you do not have a share in the property, for example if your partner owns the property. The owner has to send HM Land Registry a signed statement saying they are not the bankrupt person and an application for the cancellation of a Form J restriction . Stop or delay the sale of your home You might be able to stop the sale of your home if the equity or legal title can be sold to someone else, such as a partner. The sale can be delayed for up to 1 year if you need to organise somewhere for children or a partner to live. Speak to your trustee to find out more about stopping or delaying the sale of your house. Rented property Your landlord might be told you’re bankrupt. It’s unlikely you’ll be asked to move out of the property if you’re up to date with your rent.

The person dealing with your bankruptcy (the ‘trustee’) will decide if the things you own could be sold to pay your bankruptcy debts. If the trustee decides to sell the things you own, you must hand them over. You can usually keep: things you need for your job, like tools or a vehicle essential household items, like clothing, bedding and furniture You might have to give up these items, including vehicles, if they’re worth more than a reasonable replacement. Your trustee will either use the money from the sale to pay for a cheaper item or give you the money to buy one. Any money left will be used to pay for your bankruptcy and make payments towards your debts. Vehicles If you own a vehicle and other transport is not practical, you can usually keep it to: meet your household’s basic needs care for someone else, for example a disabled relative do your job If you got your vehicle through a finance agreement The rules are different if you got your vehicle through: hire purchase conditional sale a leasing agreement If your vehicle is worth more than the amount left to pay on it, the trustee might sell it to pay for your bankruptcy and make payments towards your debts. They cannot replace your vehicle with a cheaper alternative. If they do not sell it, they’ll let you and the finance company know. The finance company could: take back the vehicle let you or another person take over the finance agreement

If you're self employed

Your business is very likely to be closed, unless the person dealing with your bankruptcy (the ‘trustee’) decides to keep it open. You’ll need to give a list of anything you own for the business to the trustee. You can usually keep things you own for your business if you need them for employment, for example: vehicles tools equipment You might have to give them up if they’re worth more than a reasonable replacement. Your employees can make a claim for unpaid wages and holiday pay, payment in place of notice and redundancy. They’ll make this claim either: to the Redundancy Payments Service through the bankruptcy process You can trade again but with restrictions on what you can do .

You can apply to cancel (‘annul’) your bankruptcy if: the bankruptcy order should not have been made all your debts and bankruptcy fees have been paid or secured (guaranteed) by a third party - ask your trustee how much your bankruptcy fees are you‘ve made an Individual Voluntary Arrangement ( IVA ) to pay all or part of your debts How to apply Download and fill in form IAA . Send or take your completed form to your nearest court that deals with bankruptcy . You can find a legal adviser to help you. Check if you can get legal aid to help with your legal costs. If you’re eligible, Civil Legal Advice can give you advice. You’ll be given a date for a court hearing of your application, which you must attend. You’ll still need to co-operate with the official receiver or the trustee (the person dealing with your bankruptcy), for example by providing information or attending an interview. If the court agrees with your application, they’ll make an annulment order which cancels your bankruptcy. Advertise your annulment order You can ask the official receiver to publish details of your annulment. You must ask within 28 days of getting the annulment. You can only do this if your name and address have already been published to advertise the bankruptcy. Details of your annulment order will be published wherever details of your bankruptcy order appeared. After your bankruptcy is cancelled When the court cancels the bankruptcy, all bankruptcy restrictions end immediately. You’ll have to start making payments towards any debts you have left. You’ll get back possessions that the trustee did not sell. Your bankruptcy will be removed from the Individual Insolvency Register after: 28 days if the bankruptcy order should not have been made 3 months if your debts have been paid in full or an IVA has been agreed The notice in the Gazette is a permanent record of your bankruptcy but your details will be left out of internet search engine results after 1 year and 3 months. You must apply to both Land Charges and HM Land Registry to have your bankruptcy entry removed from their registers. Apply to Land Charges Send an application to cancel an entry in the Land Register (K11) to the Land Charges department. You need to include: a copy of your court order permitting the cancellation (or ‘vacation’) of the entry the correct fee for each entry you want to cancel The address is on the application form. Check how much it costs to submit a Land Charges application . Apply to HM Land Registry You need to send HM Land Registry either: an application to change the register for a property , if you’re the sole owner of your property an application for the cancellation of a Form J restriction , if you own your property with someone else You must include a copy of your court order. The address to send it to is on the application forms. Your documents will not be returned once the registers are updated. You can send copies if you write “I certify that this is a true copy of the original” and sign the document on the first page.

After 12 months, you’re usually released (‘discharged’) automatically from your bankruptcy restrictions and debts. It can take longer if you do not co-operate with the trustee (the person who’s dealing with your bankruptcy). You must still pay debts that were not included in your bankruptcy until they’re paid off. Check your discharge date online using the Individual Insolvency Register . The official receiver or trustee will continue to deal with your bankruptcy after you’re discharged. This means they’ll carry on selling your possessions that were included in the bankruptcy. If you have an Income Payments Agreement ( IPA ) or Income Payments Order ( IPO ), you must keep paying it until it finishes, even after your bankruptcy has ended. Prove your bankruptcy has ended Email the Insolvency Service and ask for a letter confirming your bankruptcy has ended. There’s no fee. Insolvency Service discharge.queries@insolvency.gov.uk If you were made bankrupt at a court You can apply for a ‘certificate of discharge’ if you need further proof your bankruptcy has ended. Contact the court and pay the fee. Public records of your bankruptcy The Individual Insolvency Register is updated within 3 months of your discharge. The notice in the Gazette is a permanent record of your bankruptcy but your details will be left out of internet search engine results after 1 year and 3 months. Your name will usually be removed from the Land Charges register after 5 years - lenders can search this register if you apply for a mortgage. The bankruptcy restriction will stay on HM Land Registry’s entry for any property you owned before the bankruptcy until the trustee has dealt with that property. When they’ve dealt with the property, the trustee can remove the restriction. Your credit record Credit reference agencies will not be told directly when your bankruptcy ends - they’ll get this information from public records. Get a copy of your credit reference report - contact a credit reference agency if it needs updating. Your bankruptcy can stay on your credit reference file for 6 years from the date of your bankruptcy.

Becoming bankrupt

Overview

Becoming bankrupt is one way to deal with debts you cannot pay. It means you could be free from most of your debts - there are some debts you might still have to pay, like child maintenance debts or student loans.

There are two ways you can be made bankrupt. You can:

There are some things you will not be able to do when you’re bankrupt.

The things you own may be sold to pay for your bankruptcy and make payments towards your debts. This can sometimes include selling your home. It can also include other possessions if they are not essential and are worth a lot of money.

Your money and income might also be used to pay for your bankruptcy and make payments towards your debts if you do not need it all to live on. Find out what happens to your money and income if you’re made bankrupt.

You can get other types of help with clearing debt you cannot manage. Find out about other options for dealing with your debts.

Only individuals can become bankrupt. Find out what your options are if your limited company cannot pay its debts.

The process to become bankrupt is different if you live in Scotland or live in Northern Ireland.

View a printable version of the whole guide

Becoming bankrupt

Overview

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Becoming bankrupt

Overview

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