What Is Bankruptcy?

Bankruptcy is a formal insolvency process for people who cannot pay their debts.

It can provide a route out of serious debt, but it has significant consequences and should be compared with the alternatives.

How do I apply in England and Wales?

An individual applies online. At September 2026, the application fee is £680 and the application cannot be submitted until the full fee has been paid, although the fee can be paid in instalments.

Scotland and Northern Ireland use different insolvency systems.

What happens to my debts?

Many debts can be dealt with through bankruptcy, but not every debt is written off.

Examples of debts that can be treated differently or remain payable include some student loans, child-maintenance liabilities and debts arising from fraud. An adviser can check the actual list in your case.

What happens to assets?

Your assets, savings, vehicle and home can be important. Some essential items may be retained, but valuable assets can potentially be realised for creditors.

If you own a home, get advice about the possible effect before applying.

Could I have to make payments from income?

Potentially. If you have income above reasonable domestic needs, an income payments arrangement or order may be relevant.

Do not assume bankruptcy means making no further contribution.

How long does bankruptcy affect me?

Discharge is normally only one milestone. Bankruptcy can remain on your credit record for six years and can affect borrowing, business activity and other matters.

Restrictions apply while you are bankrupt, and some consequences can continue beyond discharge.

Compare the alternatives first

For some people a DRO may provide a simpler route; others may be better suited to a repayment arrangement or IVA.

Use free debt advice to compare the consequences before paying the bankruptcy fee or making an application.

7.53: What Is an IVA?

7.55: How Are Debt Management Plans, DROs, IVAs and Bankruptcy Different?

7.50: Where Can I Get Free Debt Advice?

Important information

This guide provides general information and is not intended to provide financial, benefits, debt, housing or legal advice. Individual circumstances can be different. Check current information from official sources and seek advice from an appropriately qualified or authorised adviser before making important financial decisions.