Bankruptcy is a legal process usually suitable for people who little hope of paying back their debts in a reasonable time and whose circumstances are unlikely to change.

What is a Bankruptcy?

Bankruptcy works different in different parts of the UK, if you live in Scotland the process is knows as Sequestration.

 Bankruptcy can give you a fresh start and will write off your debts however the decision should not be taken lightly as it can affect other areas of your life such as your employment or living arrangements. Bankruptcy usually lasts for 12 months and there are usually no payments required, however you may be required to make payments into your bankruptcy for up to 3 years under an Income Payments Order if you have any disposable income once your bills and essential living costs are covered.  You could be asked to sell valuable assets such as your home or car, but you’ll be able to keep the things you need for day-to-day living.

Bankruptcy fees vary depending on where you live in the UK. In England and Wales you pay a total of £680. In Northern Ireland the total cost is £669. You can pay the fee in installments however you must have paid the fee in full before the application is made.

Benefits of a Bankruptcy

  • Bankruptcy usually only lasts for 12 months
  • Debts will be written off once the bankruptcy is discharged
  • Creditor contact will stop once the bankruptcy is in place

Considerations of a Bankruptcy


  • You could lose assets of value including your home if you are a homeowner
  • Once your Bankruptcy is approved you are bound by formal insolvency proceedings and your credit rating will be affected
  • Your details will be recorded on the insolvency register
  • Your employment could be affected, and you are unable to act as a company director