To be made bankrupt, a court has to issue a bankruptcy order against you. This can happen for 3 reasons:
- you apply to the court if you’re unable to pay your debts and want to declare yourself bankrupt
- your creditors (the people you owe money to) apply to make you bankrupt if you owe them £750 or more
- an insolvency practitioner applies to make you bankrupt because you broke the terms of your Individual Voluntary Arrangement
Check if you’re eligible to apply for bankruptcy in England or Wales if you live in another country.
What happens when you go bankrupt
Once the court has issued a bankruptcy order:
- 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 must follow rules called ‘bankruptcy restrictions’
- your name and details will be published on a bankruptcy register called the ‘Individual Insolvency Register’
After 12 months you’re usually discharged (released) from your bankruptcy restrictions and debts, although assets that were part of your estate during the bankruptcy period can still be used to pay your debts.
Bankruptcy only applies to individuals. Limited companies that can’t pay their creditors are ‘insolvent’ and can face compulsory liquidation.
Get help and information
Read the following:
- the Citizens Advice bankruptcy advice guide
- the Money Advice Service’s guide on options for writing off your debt
You can also contact the National Debtline for bankruptcy advice.