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A guide to bankruptcy in the UK

A guide to bankruptcy in the UK
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Bankruptcy is a debt solution available to people here in the UK. If you are struggling with debt, it could be a way to wipe the slate clean and move forwards. However, bankruptcy is not for everyone. It is a big financial step. So, if it is something you are considering, it could help to first speak to a non-profit debt counselling service such as the StepChange debt charity or the Citizens Advice Bureau.

If you just want a bit more information about the process, here’s our guide to filing for bankruptcy in the UK.

Bankruptcy in England and Wales

How you apply for bankruptcy in the UK depends on where you live or where your business is based. In England and Wales you can make yourself bankrupt by filling in what is called a ‘debtor’s bankruptcy application’. This can be found on the gov.uk website. 

This is an online application in which you include information about your situation so that an adjudicator can assess whether you should be made bankrupt. The adjudicator will be someone who works for the Insolvency Service.

In the application you will need to include the following:

  • Information on you and the businesses you run – including debts, income and outgoings.
  • A declaration about your eligibility for bankruptcy based on where you live or where your business is based.
  • Details of any previous bankruptcies.
  • Details of any other insolvency procedures you’ve been through.
  • Any letters you’ve received from bailiffs or enforcement agents.

There is a £680 fee to file for bankruptcy. This will need to be paid before you submit your application. If you cannot afford the full fee, there is an option to pay it in instalments.

A decision will be made on your application within 28 days. If you are declared bankrupt, you will then receive a copy of the bankruptcy order. Any assets you own can then be used to pay off your debts, and you will be bound by the bankruptcy restrictions in England and Wales. For more on this, check out our What is bankruptcy? article.

Bankruptcy in Scotland

In Scotland, bankruptcy is sometimes called sequestration. If you are declared bankrupt in Scotland, your finances are controlled by a person called a trustee. It is then their job to manage all of your assets with the aim of paying off your creditors.

You will need to complete a debtor application pack from the Accountant in Bankruptcy. The fee in Scotland is £200 through the full administration route, or £90 if applying via a minimal asset process route.

The form will include details about your debts, income and outgoings. Once the correctly filled application has been accepted, bankruptcy is typically awarded within five working days.

During the process, the trustee will compile a permanent record of the bankruptcy. This is called the sederunt book and will contain copies of court orders, accounts and records of meetings.

Bankruptcy in Northern Ireland

If you live in Northern Ireland and decide that bankruptcy is a suitable option for you, then you will need to fill in two forms. You can get these from the Bankruptcy and Chancery Division of the High Court of Belfast or from the Insolvency Service.

The first form is a debtor’s bankruptcy petition, in which you will need to include the reasons for asking for bankruptcy. The second is a statement of affairs. In this you will need to list all of your assets and all of your debts, including the names and addresses of creditors and the amount you owe.

In Northern Ireland there are three separate fees that you will be required to pay. A £525 deposit to administer your bankruptcy, a court fee of £144 and a £7 fee due to a solicitor before whom you will swear the contents of your statement of affairs.

Once you have been declared bankrupt, an official receiver is appointed to protect your assets. They will act as your trustee if you have no assets.

If you do have assets, an insolvency practitioner will be appointed as your trustee and they will be in charge of selling your assets to pay your creditors.

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