Bankruptcy in the UK: How It Works and What It Costs

In England and Wales you apply for bankruptcy online to an adjudicator at the Insolvency Service, it costs £680, and you are usually freed from most of your debts after 12 months. Scotland and Northern Ireland run separate systems with different routes, fees and timescales. Bankruptcy is one of several formal debt solutions, and it has lasting effects on your home, income, credit and some jobs, so free regulated debt advice is the place to start before choosing any of them.

Is bankruptcy the right option?

Bankruptcy is a legal process that deals with debts you cannot pay. It is not the only one, and for many people it is not the most suitable. A debt relief order may cover smaller debts with no fee, an IVA can protect a home, and a breathing space can pause creditor action while you decide.

Our comparison of UK debt solutions sets the options side by side. The debt and money hub covers related topics such as bailiffs and county court judgments.

Free, independent debt advice is available in every part of the UK. In England and Wales, gov.uk's free debt advice page lists services including National Debtline, Citizens Advice and StepChange. In Scotland, mygov.scot lists free debt advice including Advice Direct Scotland. In Northern Ireland, nidirect names Advice NI and StepChange. Be wary of any firm that charges to arrange something these services do free.

How bankruptcy works in England and Wales

Bankruptcy in England and Wales is governed by Part IX of the Insolvency Act 1986. There are two ways in: you apply yourself, or a creditor petitions the court.

Applying yourself

You apply to an adjudicator, an official at the Insolvency Service, not to a court. Under section 263H of the Insolvency Act 1986, the only ground is that you are unable to pay your debts.

gov.uk says you can only apply online and that it costs £680. You should get an email or letter with the decision within 28 days of submitting. If you are struggling to pay the fee, gov.uk says a charity may be able to help.

The £680 is made up of two parts under the Insolvency Proceedings (Fees) Order 2016: a £130 adjudicator's fee and a £550 deposit. If the adjudicator refuses to make a bankruptcy order and no review is requested, the order says the deposit must be repaid. We found no provision for refunding the £130.

Under section 263K, the adjudicator must make the order if satisfied that you are unable to pay your debts on the date of the decision, that England and Wales has jurisdiction, and that no petition or order is already in place. Otherwise the application must be refused.

You may see a much larger figure, £2,390, quoted as the official receiver's administration fee for a debtor's bankruptcy since 9 January 2025 (SI 2024/963). That fee is taken from the bankruptcy estate. It is not an extra sum you pay up front.

When a creditor makes you bankrupt

A creditor can petition the court if the unsecured debt owed to it, or to several petitioning creditors together, is equal to or more than the bankruptcy level of £5,000 (section 267). The debt must be a fixed sum and you must appear unable to pay it.

gov.uk says creditors usually start with a statutory demand or a court judgment. The court sets a hearing at least 14 days after you are given the petition. If you want to oppose it, you need to file form Bank 6 at least 5 days before the hearing. There is no court fee to oppose, but you may have to pay costs.

A petition can also follow if you break the terms of an IVA. If you receive a statutory demand or petition, get advice quickly: there may be grounds to challenge it, or time to agree a payment plan. Our guides to debt collection and statute-barred debt cover related rights.

What happens after the bankruptcy order

gov.uk explains that the official receiver will usually deal with your bankruptcy from start to finish, acting as your trustee. Creditors can sometimes ask for a different trustee, usually an insolvency practitioner.

The official receiver will usually contact you within about 2 weeks and may interview you by phone, video or in person. Their report to creditors usually takes 4 weeks but can take up to 12. You must cooperate and give full information about your money, property and debts.

Your bank will usually freeze your accounts. The trustee can ask the bank to release money you urgently need, and a bank you owe money to may take it from your account.

Your name and address are published on the Individual Insolvency Register and in the Gazette. If publishing your address would put you at risk of violence, you can apply to court to keep it off; gov.uk says there is no fee for that application.

What you can keep

Some things never become part of the bankruptcy estate. Section 283(2) excludes the tools, books, vehicles and equipment you need personally for your work, and the clothing, bedding, furniture, household equipment and provisions needed for the basic domestic needs of you and your family.

That protection has a limit. gov.uk says you might have to give up these items, including a vehicle, if they are worth more than a reasonable replacement. Vehicles on hire purchase, conditional sale or lease follow different rules, so tell the official receiver about any finance agreement.

gov.uk also says you can usually keep money you have previously paid into a UK pension. Confirm your own position with your trustee.

Your home

Bankruptcy does not mean your home is sold straight away. Under section 283A, if the trustee does not sell, apply for possession or a charging order, or reach an agreement about your interest in the home within 3 years of the bankruptcy, that interest returns to you. If you did not tell the trustee about the property within 3 months, the 3 years only starts once they find out.

gov.uk says the trustee can sell the home or apply for a charging order if your share of the equity is more than £1,000. A sale can be delayed for up to 1 year if children or a partner live there. Where you own the home jointly, only your share passes to the trustee.

Your name is added to the Land Charges register, and if you own a property alone, HM Land Registry records a restriction against it.

Paying from your income

If you can afford it, you may have to pay part of your income towards your debts. This is done by an income payments agreement with your trustee (section 310A) or, if you do not agree, an income payments order from the court (section 310).

Either can last up to 3 years from when it starts, and the court cannot set payments that leave you below what you need for the reasonable domestic needs of you and your family. Payments continue after discharge until the arrangement ends. gov.uk says that if your main or only income is state benefits, your trustee will not normally ask for an agreement.

Discharge: when bankruptcy ends

Under section 279(1), you are discharged at the end of one year from the date the bankruptcy began. It happens automatically, but the court can suspend the clock if the official receiver or trustee shows you have not cooperated.

Discharge releases you from most bankruptcy debts, but not all. Under section 281, you still owe debts arising from fraud, fines and confiscation orders, and, unless the court decides otherwise, damages for personal injury and liabilities from family proceedings such as child support. A secured lender, such as a mortgage lender, keeps its right to enforce its security.

gov.uk adds that student loans and DWP budgeting and crisis loans are not cleared.

A bankruptcy can be cancelled (annulled) by the court in limited cases, for example if the order should not have been made or all the debts and fees have been paid or secured. gov.uk explains the application process.

Restrictions while you are bankrupt

gov.uk says that while you are bankrupt you cannot:

• borrow more than £500 without telling the lender you are bankrupt
• act as a company director without the court's permission
• create, manage or promote a limited company without the court's permission
• run a business without telling those you deal with the name you were made bankrupt in

You might be prosecuted if you break these restrictions. They normally end with your discharge.

Some professions and public roles have their own rules about bankruptcy, set by the relevant regulator or employer. If you are in a regulated job, check with your regulator before you apply.

Bankruptcy restrictions orders and undertakings

If the official receiver thinks you behaved dishonestly or recklessly, your restrictions can be extended. The court can make a bankruptcy restrictions order (BRO) on the application of the Secretary of State or the official receiver acting on the Secretary of State's direction (Insolvency Act 1986, Schedule 4A). The application is normally made within one year of the bankruptcy starting.

The conduct the court considers includes failing to keep records, giving away assets or favouring some creditors, gambling or unreasonable extravagance, fraud, and failing to cooperate with the official receiver or trustee. A BRO lasts at least 2 years and no more than 15.

gov.uk says the official receiver will usually first ask you to agree a bankruptcy restrictions undertaking (BRU). It has the same effect as an order but avoids a court hearing.

Credit file and public records

gov.uk sets out how long the bankruptcy stays on record:

Credit reference agencies are not told directly when your bankruptcy ends, so check your credit files after discharge. Our guide to CCJ removal explains how court records and credit files interact.

Scotland: sequestration

In Scotland, bankruptcy is called sequestration and is governed by the Bankruptcy (Scotland) Act 2016. It is run by the Accountant in Bankruptcy (AiB), a Scottish Government agency. You apply through an approved money adviser, which can include an insolvency practitioner (Bankruptcy (Scotland) Regulations 2016, regulation 4); mygov.scot says you can apply if you live in Scotland or have lived there within the last year.

There are two routes for a debtor's own application, set out in section 2 of the 2016 Act.

The fees come from the Bankruptcy Fees (Scotland) Regulations 2018. The £150 is waived if you receive certain benefits, including universal credit, pension credit, jobseeker's allowance and employment and support allowance, if you received Scottish Welfare Fund help in the previous 3 months, or if the common financial tool shows no surplus income.

mygov.scot says you usually get a decision within 8 working days.

Discharge and payments in Scotland

Discharge works differently from England and Wales. In a full administration, AiB may discharge you any time after 12 months from the award (section 138); it is a decision, not automatic. In a MAP, you are discharged 6 months after the award (section 140).

Discharge does not always end your payments. mygov.scot says a debtor contribution order usually lasts 48 months.

mygov.scot also says your bankruptcy stays on the Register of Insolvencies for at least 5 years for most people, or 18 months for MAP, and on your credit file for at least 6 years. If your trustee seeks to sell your home through the sheriff court, the court can delay the order for up to 3 years.

While bankrupt in Scotland you must disclose your bankruptcy when seeking credit over £2,000, or any amount if you owe £1,000 or more in other debts.

A pending change to MAP

On 8 October 2026 the Accountant in Bankruptcy announced that draft regulations were laid on 7 October 2026 to widen access to MAP and raise the protected values for vehicles, tools of the trade and sentimental items. If approved, most provisions are expected to come into force on 1 April 2027. Until then, the figures above apply.

Scotland also has a 6-month moratorium on creditor action and a Debt Arrangement Scheme. See breathing space and the Scottish moratorium.

Northern Ireland

Northern Ireland bankruptcy is governed by the Insolvency (Northern Ireland) Order 1989. nidirect says bankruptcy petitions can only be presented in the High Court in Belfast, by a creditor, by the debtor, or by the supervisor of an IVA.

A creditor can petition for a debt equal to or more than £5,000 (Article 241). Where the petition relies on a statutory demand, at least 3 weeks must have passed since it was served.

The cost of a debtor's petition

The Department for the Economy says a deposit of £525 is payable in all cases. On top of that is a court fee, which the court may waive, for example if you receive income support, and a solicitor's fee of around £7 for swearing your statement of affairs.

The official sources disagree on the court fee: the Department for the Economy gives £151 and nidirect gives £189. Check the current figure with the Northern Ireland Courts and Tribunals Service before you apply.

Discharge and effects in Northern Ireland

Under Article 253(1), you are discharged at the end of one year from the date the bankruptcy began. The official receiver is your trustee unless the court appoints an insolvency practitioner, and an income payments agreement or order can also be made.

The Department for the Economy says the trustee usually holds your interest in the home for 3 years before it may come back to you, and applies for a charging order only if your interest is worth more than £1,000. While bankrupt you cannot obtain credit of £500 or more without disclosing your bankruptcy, or act as a company director without the High Court's permission. A restrictions order can last between 2 and 15 years.

nidirect says the official receiver does not notify credit reference agencies and that your details stay on the insolvency register for 10 years.

Frequently Asked Questions

How much does it cost to go bankrupt in the UK?

In England and Wales the fee is £680, made up of a £130 adjudicator's fee and a £550 deposit. In Scotland there is no fee for the Minimal Asset Process and £150 for full administration, with exemptions for people on certain benefits. In Northern Ireland a debtor's petition needs a £525 deposit plus a court fee, which official sources give as £151 or £189, so check it with the court.

How long does bankruptcy last?

In England and Wales and in Northern Ireland you are discharged automatically at the end of one year, unless the court suspends the clock because you did not cooperate. In Scotland the Accountant in Bankruptcy may discharge you after 12 months in a full administration, and MAP discharge comes after 6 months. Income payments can continue after discharge: up to 3 years in England and Wales, and a Scottish contribution order usually lasts 48 months.

Will I lose my house if I go bankrupt?

Not automatically. In England and Wales the trustee has 3 years to deal with your interest in the home, and gov.uk says they can sell or seek a charging order if your share of the equity is more than £1,000. A sale can be delayed for up to 1 year if children or a partner live there. If you own a home, ask a free debt adviser whether another option, such as an IVA, would protect it.

Can a creditor make me bankrupt for a small debt?

In England and Wales and in Northern Ireland a creditor can only petition if the unsecured debt is £5,000 or more, either owed to one creditor or to several petitioning together. Creditors usually send a statutory demand or get a court judgment first. If you receive one, get free advice quickly.

Which debts are not wiped out by bankruptcy?

In England and Wales you still owe fines, confiscation orders and debts from fraud, and usually personal injury damages and family-court liabilities such as child support. gov.uk adds student loans and DWP budgeting and crisis loans. Secured lenders keep their right to enforce their security.

How long does bankruptcy stay on my credit file?

gov.uk says 6 years from the date of the bankruptcy in England and Wales, and mygov.scot says at least 6 years in Scotland. Credit reference agencies in England and Wales are not told directly when your bankruptcy ends, so it is worth checking your files after discharge.

Can I apply for bankruptcy myself in Scotland?

You cannot apply on your own. In Scotland you apply to the Accountant in Bankruptcy through an approved money adviser or an insolvency practitioner, who will also check whether MAP, full administration or another option suits your situation.

Can I be a company director while bankrupt?

Not without the court's permission. In England and Wales you also cannot create, manage or promote a limited company without permission, and in Northern Ireland you need the High Court's permission. Breaking these restrictions can lead to prosecution.