manage your debt
with bankruptcy

The cost of bankruptcy varies slightly depending on your location in the UK.

In England and Wales:

• £130 for the application fee
• £550 for the bankruptcy deposit

In Northern Ireland:

• £151 for the court fee
• £525 for the bankruptcy deposit
• Around £7 for the solicitor’s fee

It’s worth noting that in Northern Ireland, the court fee may be waived if you have a low income or receive certain benefits.

In certain situations, you can include some secured debts in your bankruptcy.

For mortgages and secured loans:

You can include these debts if you surrender your house or if your house is repossessed. However, if you decide to keep your home, you must continue paying the mortgage and any loans secured against it. Failure to do so may result in losing your home.

Regarding hire purchase and logbook loan agreements:

Finance companies often cancel these agreements if you declare bankruptcy. This means you’ll need to return the car or other item, but the debt will be included in your bankruptcy. Alternatively, if you’re allowed to keep the car or other item, you’ll still be required to make the payments.

Once you declare bankruptcy, you might be asked to make payments towards your included debts, but only if you can afford to. Your creditors will stop chasing you for payments.

After about 12 months, when your bankruptcy period ends, any remaining debts covered by your bankruptcy will be forgiven.

While you’re bankrupt, you need to follow certain rules. One of these rules is cooperating with the official receiver, who manages your bankruptcy. This means providing them with any information they ask for.

During bankruptcy, you can’t:

• Start a company or be a director without court permission.
• Do business under a different name without telling everyone you work with about your bankruptcy.
• Borrow £500 or more without telling the lender you’re bankrupt.

Breaking these rules could lead to imprisonment.

Bankruptcy will affect your home in different ways depending on whether you own or rent it.

Bankruptcy for homeowners

If you have a mortgage on your home and there’s some equity in the property, you will usually have to sell it. Some of this will go to the official receiver (the person dealing with your bankruptcy) to cover their costs. The rest will be shared between your creditors.

Bankruptcy for private and social housing tenants

As long as your rent payments are up to date, you should be able to stay in your home after bankruptcy.

If you’re behind with your rent, this debt will be included in your bankruptcy. Your landlord won’t be able to take you to court to get their money back, but they may still evict you. This is less likely to happen if you’re a social housing tenant rather than a private tenant.

Obtaining a mortgage can be challenging even with a strong credit score. If you’ve undergone bankruptcy, the process becomes even tougher, though not impossible.

Your bankruptcy record remains on your credit report for six years from its initiation. This duration may make securing a mortgage highly difficult. While it’s feasible to obtain a mortgage from a specialist lender during this period, it typically comes with higher costs.

Even after the bankruptcy no longer appears on your credit file, mortgage providers may inquire about your bankruptcy history, affecting your application’s approval chances.

To enhance your likelihood of obtaining a mortgage, focus on improving your credit score. Responsible borrowing, repaying small amounts consistently and punctually, aids in this process.

Additionally, factors such as offering a substantial deposit and being open to higher-than-average interest rates initially may boost your prospects.

Over time, as you demonstrate responsible credit usage post-bankruptcy, your chances of obtaining a mortgage improve. It’s crucial to showcase to lenders that you’re no longer a high-risk borrower.

When you’re made bankrupt, your details will be added to the public insolvency register. They will stay on there until three months after your bankruptcy ends.

You can ask to have your address removed from the register if publishing it puts you at risk of violence.