Bankruptcy FAQ

Find the answers to frequently asked questions about bankruptcy

Bankruptcy could help you to:

  • Write off unsecured debt that you cannot afford
  • Stop further action from your unsecured lenders
  • Start again with your finances

Do You Qualify For Bankruptcy?

Call 0800 970 7673

Fees & Key information

Find out more about the fees involved with each debt solution.

Find out if you qualify for Bankruptcy

Tell us about your situation

Tell us about you

Useful free guides

Download the Insolvency Service guide to dealing with lenders.

Download the information package from Scotland’s Insolvency Service.

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What is bankruptcy?

Bankruptcy is a legal process that could write off any unsecured debts that you can't afford. It is worth getting bankruptcy advice if you are considering getting out of debt this way, or if your lenders are trying to make you bankrupt, because there are a number of consequences.

For example, if you can afford to do so you may be expected to make payments towards your debts for up to three years, and your home could be sold if you are a homeowner. Bankruptcy can also affect your ability to borrow money for up to six years in the future, although further restrictions on obtaining credit may apply after that time.

You must attend a County Court where your case will be assessed. Once your bankruptcy is agreed, you hand over all rights to your assets to a Trustee. Bankruptcy ends when you are discharged, which is usually after one year.

What is sequestration?

The process of bankruptcy in Scotland is sometimes known as 'sequestration'. Sequestration and bankruptcy are basically the same thing, although the rules for bankruptcy in Scotland differ in some ways to the rest of the UK.

For example, in Scotland you must have at least £1,500 or more of unsecured debt before you can be made bankrupt. In England you can be made bankrupt with only £750 of unsecured debt that you cannot repay.

How much does bankruptcy cost?

Entering bankruptcy does cost money, and this will vary depending on where in the UK you live.

In England, Wales and Northern Ireland, the fee includes all the necessary administration to process a bankruptcy application, the preparation of the court documents you will need and the communications with your lenders. You will also receive ongoing support from a Personal Insolvency Specialist in the period running up to your bankruptcy and the 12 months following your Order. These fees can be paid in installments.

Find out more about the fees involved with bankruptcy.

In Scotland, the fees are different, and so is the process. The initial fee is paid to the Accountant in Bankruptcy (AiB). There is no way of getting the fee waived, but you may be able to pay in installements.

Find out more about the fees involved with bankruptcy in Scotland.

What do I have to do during bankruptcy?

You would be expected to tell the 'official receiver' (who helps to oversee your bankruptcy) about all your assets and provide any financial documents that they need, such as bank statements. During the bankruptcy you would be expected to tell the Trustee (who also oversees your bankruptcy) about any changes to your financial situation - for example, if you inherited property or if you received any significant cash payments.

You would only be able to borrow more money (limited to £500) under certain circumstances.

You can find out more about what to expect during bankruptcy when you speak to a debt adviser or Insolvency Practitioner.