How to File for Bankruptcy in the U.K.

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1Filing in England and Wales

2Applying for Bankruptcy in Scotland

3Filing for Bankruptcy in Northern Ireland

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In bankruptcy, you can eliminate some or all of your debts. However, the person who runs the bankruptcy can sell some of your assets to pay your creditors. Before filing, you should talk with a professional counselor to understand your options. Once you decide on bankruptcy, the process is generally not complicated. However, the method of filing will depend on where you live: England and Wales, Scotland, or Northern Ireland.

Steps

Method 1

Method 1 of 3:

Filing in England and Wales

1. 
   1
   Consider options other than bankruptcy. The U.K. government encourages that you consider whether you have other options than bankruptcy. You can get free debt advice from a debt adviser by contacting the Money Advice Service. You can also complete an online questionnaire here: https://www.gov.uk/pay-off-debts/ Click on “Start now.” You will be asked about the following:

   • amount of money you owe
   • your assets
   • your income
2. 
   2
   Gather required financial information. Before sitting down to apply for bankruptcy, you should gather necessary financial information to use in the application. Collect the following:

   • wage slips
   • statement of pension or benefits
   • utility bills
   • other bills, such as credit card statements
   • letters from an enforcement agent or bailiff
3. 
   3
   Determine if you need to hide your location. After a court finds you bankrupt, your name and address will be published in the London Gazette and the Individual Insolvency Register. If you are at risk of violence, you might want to withhold your address. You will need a judge to sign off on this.

   • Complete application form 7.1A and take it to the nearest court that handles bankruptcy, which you can find here: https://www.gov.uk/find-court-tribunal.
   • You may have to pay a fee. The court will tell you.
   • You must attend a hearing. You will be told when.
4. 
   4
   Apply for bankruptcy online. Visit https://www.gov.uk/apply-for-bankruptcy and click on the “Start now” button. You can only apply online and it costs £680. You may pay in installments.

   • If you need help, contact the Insolvency Enquiry Line at 0300 678 0015, Monday through Friday, 9:00 am to 5:00 pm.
   • You may also email [email protected].
5. 
   5
   Receive your bankruptcy order. Within 28 days of submitting your application, the adjudicator should notify you whether you are bankrupt. However, you might be asked more questions so that they can properly assess your application.

   • Within two weeks, you’ll receive a letter from the Official Receiver. This person manages your bankruptcy.
   • You should also receive an information pack.
6. 
   6
   Attend an interview. Some bankrupts must attend an interview. The purpose is to gather more information about your finances so that the Official Receiver can administer the bankruptcy. For example, the interview might cover the following:

   • more details about your savings or pension
   • confirmation about your debts and property
   • why you became bankrupt
   • whether you have any questions
7. 
   7
   Follow the bankruptcy restrictions. You must follow all restrictions imposed on you, which will last for the length of the bankruptcy. You can be criminally prosecuted if you violate any of them. For example, you can’t do the following:

   • borrow more than £500 without informing your lender that you are bankrupt
   • manage, promote, or create a company without the court’s permission
   • act as a director of a company without the court’s permission
   • work as an authorized debt specialist
   • manage a business with a different name without informing people that you are bankrupt
8. 
   8
   Hand over assets to be sold. The Official Receiver might act as your trustee and sell your assets to pay creditors. Whether your assets will be sold depends on the asset. For example, the following rules generally apply:

   • You can usually keep household items, such as clothing.
   • You can also keep property you need for your job, such as a vehicle or tools.
   • Your bank accounts will be frozen. However, the trustee can allow you to use money to buy food or cover other urgent needs. Also, your partner can access their share of a joint account.
   • You may need to give up your home if you have equity in it (i.e., it is worth more than your mortgage). However, you can keep it if your equity is £1,000 or less. You can also delay the sale if you need to find a new place for a partner or child to live. If possible, you can also arrange for a partner to buy your half of the property.
9. 
   9
   Make monthly payments. Depending on your income, you may need to pay your creditors under an Income Payment Agreement. This agreement can last up to three years. You will pay a percentage of whatever you have left over after paying for essentials (e.g., food).
10. 
    10
    Receive a discharge. Your bankruptcy ends with a discharge, which is typically automatic after 12 months. If you need a Certificate of Discharge, then you can get one from the court that handled your bankruptcy.

    • The Individual Insolvency Register will be updated within three months.
    • You must also apply to have your bankruptcy entry removed from the Land Registry and Land Charges.
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Method 2

Method 2 of 3:

Applying for Bankruptcy in Scotland

1. 
   1
   Meet with a money adviser. In Scotland, being declared bankrupt is called “sequestration.” Before you can apply for bankruptcy, you should meet with a money adviser. They can discuss alternatives to bankruptcy.

   • The Scottish government recommends you contact National Debtline Scotland for advice. Their website is available here: https://www.nationaldebtline.org/S/Pages/default.aspx.
2. 
   2
   Satisfy requirements to file in Scotland. You can only apply for bankruptcy in Scotland if you currently live in Scotland or have lived in the country during the past year. You also cannot have been declared bankrupt during the past five years.
3. 
   3
   Check if you qualify under the minimal asset process (MAP) rules. There are three ways to qualify as bankrupt in Scotland. One way is to prove you have minimal assets. You will qualify if the following is true:

   • Your debts must be between £1,500-17,000.
   • You don’t own any land or buildings.
   • You own no asset worth more than £1,000. Your car is excluded if it is worth £3,000 or less.
   • Your total assets (excluding household items like furniture) is not more than £2,000.
   • After you pay essential bills, you don’t have any money left over to pay creditors.
   • You haven’t had a MAP bankruptcy in the past 10 years or any other bankruptcy in the past five years.
   • You have a valid certificate for sequestration.
4. 
   4
   Prove you are apparently insolvent. If you don’t qualify under MAP, you can still file if you are apparently insolvent. To be insolvent means you can’t pay your debts as they become due. You will qualify if the following is true:

   • You must be at least £3,000 in debt.
   • You cannot have been bankrupt within the last five years.
   • You owe bills you cannot pay. This can occur in a variety of circumstances. For example, you might have received a “charge for payment” and 14 days have passed without paying the debt. Alternately, a creditor might have served you with a statutory demand requiring you to pay a debt within 21 days.
5. 
   5
   Receive a formal “certificate for sequestration.” The third way to qualify as bankrupt is to receive a “certificate for sequestration” from an authorized person. This certificate confirms you cannot pay your bills as they fall due and is good for 30 days. An authorized person might be any of the following:

   • Insolvency practitioner
   • money adviser who works at a local council or citizens advice bureau
   • money adviser employed by an accredited advice agency
6. 
   6
   Complete the online application. Scotland prefers you apply online. If you meet with a money adviser, they can help you complete the application. If you have no access to the Internet, you should contact the Accountant in Bankruptcy (AiB) for a paper application (phone: 0300 200 2600).

   • Self-employed individuals should contact Business Debtline for help. They can be reached at 0800 197 6026 or on the Internet at www.bdl.org.uk.
   • If you apply for bankruptcy per MAP rules, you pay a £90 fee.
   • If you apply using another process, you will pay £200 in fee.
7. 
   7
   Meet with your trustee. A trustee administers the bankruptcy. If you file for a MAP bankruptcy, then the AiB will be your trustee. Others who file will either have the AiB or an insolvency practitioner as their trustee. You must meet with your trustee to discuss the following:

   • the trustee explains what their role will be
   • you will check the details of your application together
   • the trustee will talk about your obligations during bankruptcy
   • the trustee can answer any questions you have
8. 
   8
   Receive a debtor’s contribution order (DCO). The Accountant in Bankruptcy analyzes your income and decides whether you make more than you need to sustain a reasonable living standard. If you do, then you must contribute some of this surplus to your creditors. Typically, a DCO lasts for four years.

   • You have the right to appeal this decision within 14 days of receiving it. For advice, contact the National Debtline website.
   • If you have a change in circumstances, then you can ask the trustee to change your DCO or stop it.
9. 
   9
   Transfer assets. Once you are declared bankrupt, your property is transferred to the trustee. He or she may sell your property and use the proceeds to pay your creditors. For example, you may lose your home if you have equity in it (e.g., the value of your home exceeds any mortgage).

   • If your spouse lives in the home, the trustee will not sell it.
   • You might own the home jointly with another person. If so, the trustee can only sell the half owned by the bankrupt.
   • Your trustee can still sell your home even after you receive your bankruptcy discharge, unless the trustee abandons the property and returns it to you.
10. 
    10
    Receive a discharge of some debts. Your bankruptcy will write off most unsecured debts. These are debts that aren’t tied to any asset. However, you will still be responsible for some debts, including the following:

    • student loans
    • debt obtained through fraud
    • secured loans
    • court-ordered fines, penalties, compensation, or forfeiture
    • maintenance payments to an ex-spouse
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Method 3

Method 3 of 3:

Filing for Bankruptcy in Northern Ireland

1. 
   1
   Complete paperwork at the High Court. You must file your bankruptcy petition with the Chancery Division of the High Court in Chichester Street, Belfast. You may also file online. You must complete the following:

   • Bankruptcy Petition (form 6.30)
   • Statement of Affairs (form 6.31)
2. 
   2
   Pay fees. When you apply, you must pay a deposit of £525. This money is non-refundable. There is also a court fee of £115. If you can’t afford the court fee, then ask if the court will reduce it or waive it.

   • You must also pay a solicitor to witness you swear an affidavit that you are telling the truth. This will cost you about £7.
3. 
   3
   Request a court hearing. Go to the courthouse and request a hearing. Make sure to take the following documents with you when you make your request:

   • bankruptcy petition
   • statement of affairs
   • affidavit
   • court fee
   • deposit or receipt if paid online
4. 
   4
   Receive a bankruptcy order. At your hearing, the judge will decide if bankruptcy is right for you or if you should consider other options. If approved, the Official Receiver will take over your case. Your bank accounts will be frozen, as will your building society accounts.

   • Your creditors can no longer take action against you once you receive the bankruptcy order.
5. 
   5
   Attend an interview with your Official Receiver. Within 10 days of receiving your bankruptcy order, you should meet with the Official Receiver for an interview. You should take a copy of your statement of affairs to the interview because you will need it to complete a questionnaire.

   • You may attend the interview over the phone or request a face-to-face meeting. Since you will be working with the Official Receiver, you should probably schedule an in-person meeting.
6. 
   6
   Complete the bankruptcy. Bankruptcy can take up to year in Northern Ireland. The Official Receiver or a Trustee will take control of your money and possessions. They may sell some of the possessions and use the proceeds to pay your creditors.

   • You won’t lose equipment you need for work, such as a vehicle or tools. You also won’t lose household items, such as clothing, furniture, and bedding.
   • However, you may lose your home if it has enough value in it. It’s possible for family or friends to buy out your share of the home.
   • Work with your Official Receiver. If you don’t cooperate, then you might suffer a bankruptcy restriction order, which can last for 15 years. It will limit your ability to gain credit.
7. 
   7
   Make income payments. The Official Receiver will review your income and determine whether you should make payments to your creditors. The payments can last up to three years. If you choose not to pay, the Receiver can get a court order.

   • You must also notify the Official Receiver of changes in your income.
8. 
   8
   Receive your discharge. Your bankruptcy will last for one year, after which you typically will receive a discharge. A discharge wipes out debts. However, only some debts can be discharged. The following cannot be wiped out and you will continue to pay them:

   • student loans
   • social fund debt
   • court fines
   • debts procured through fraud
   • child support or maintenance payments
9. 
   9
   Obtain help with bankruptcy. You might feel overwhelmed and not know where to start. If so, you should get as much assistance as possible. Look to the following, depending on your circumstances:

   • Citizens Advice. For help considering your options other than bankruptcy, call Citizens Advice. You can discuss budgeting, help with debt, and mortgage issues. You can find your nearest Citizen’s Advice Bureau here: https://www.citizensadvice.org.uk/about-us/contact-us/contact-us/contact-us/
   • Insolvency Service. Call or stop online to find out more about the bankruptcy process in Northern Ireland. You can call 028 9025 1441 (9:00 am to 5:00 pm) or visit www.detini.gov.uk.
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