How to apply for your own bankruptcy in England and Wales

If your debts have become unmanageable, you can apply for your own bankruptcy in England and Wales. It is a formal process that writes off most debts, though you may lose assets in return. You can only apply online, through GOV.UK, and the decision is made by an adjudicator — an official at the Insolvency Service who reviews your application.

How do you apply for bankruptcy and what does it cost?

You can only apply online at GOV.UK. The fee is £680. You can pay in instalments, but you cannot submit your application until the fee is paid in full. Have details of your income, outgoings and debts ready — wage slips, benefit or pension statements, bills and letters from bailiffs. You can create an account, save your progress and return to it later. The adjudicator usually decides within 28 days, though it can take longer if they need more information.

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What does bankruptcy actually do?

Bankruptcy writes off most of your debts, but your assets can be sold to pay creditors. An official receiver deals with your case. They check whether you have other money that could pay your debts, such as a pension or savings; if you do, they may refuse to make you bankrupt. Valuable assets, including a home you own, can be sold. If you solely own a property, HM Land Registry adds an entry to its register, which can mean you cannot sell the property yourself. Your address becomes publicly available.

How long does bankruptcy last and how does it affect your credit?

Bankruptcy usually lasts 12 months. After that you are automatically released — ‘discharged’ — from your bankruptcy restrictions and most debts. It can take longer if you do not co-operate with the trustee. The bankruptcy can stay on your credit reference file for 6 years from its start date, and during that time it will be harder to borrow, get a mortgage or even open some bank accounts. Any debts not included in the bankruptcy must still be paid after discharge.

What are the alternatives to bankruptcy?

Before applying, it is worth considering other options, which are often less drastic:

• Debt Relief Order (DRO) — for people with little money or few assets. You may qualify if you owe less than £50,000, have less than £2,000 worth of assets, do not own a vehicle worth £4,000 or more, and have less than £75 a month spare income. A DRO also lasts 12 months.
• Individual Voluntary Arrangement (IVA) — an agreement to pay your debts in instalments, managed by an insolvency practitioner.
• Debt Management Plan — an informal agreement with your creditors managed by a financial company.
• Administration Order — possible if you have a county court or High Court judgment against you for debts under £5,000.

Where can you get free debt advice?

Before deciding, speak to a debt adviser — help is available for free. The government-backed MoneyHelper service explains how to manage debt and can point you to free debt advice. Free advice is also available from debt charities. An adviser can help you choose whether bankruptcy or one of the alternatives is right for you.