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Declare Yourself Bankrupt in the UK: Your 2026 Guide

If you are struggling with unmanageable debt, you may be considering whether to declare yourself bankrupt. Bankruptcy is a formal insolvency process that can write off most of your unsecured debts, giving you a fresh financial start. This guide explains how to declare yourself bankrupt in 2026, what it costs, what happens to your assets, and what alternatives you should consider before applying.

What Does It Mean to Declare Yourself Bankrupt?

When you declare yourself bankrupt, you are applying to the court for a bankruptcy order. In England and Wales, you do this through an online application to the Insolvency Service via the GOV.UK bankruptcy application service. Once your application is approved by an adjudicator, your unsecured debts are included in the bankruptcy order and you are released from most of them after 12 months.

Bankruptcy is designed for people who genuinely cannot repay what they owe. It is not a quick fix or an easy way out. There are real consequences to going bankrupt, including the potential loss of assets, restrictions on borrowing, and a lasting mark on your credit file. However, for many people, it provides the only realistic path to becoming debt free.

The process is handled by the Insolvency Service, which is the government body responsible for personal insolvency in England and Wales. Scotland has its own system called sequestration, which works differently.

How Much Does It Cost to Declare Yourself Bankrupt?

The current fee to apply for bankruptcy in England and Wales is \u00a3680. This is a single fee payable to the Insolvency Service when you submit your online application. There is no court hearing involved for debtor applications, as the process moved entirely online in 2016.

If you cannot afford to pay the \u00a3680 upfront, you may be able to:

Save towards the fee over time before applying
Ask a debt charity like StepChange for help and guidance
Check whether a Debt Relief Order (DRO) might be more suitable, as this costs just \u00a390
Contact MoneyHelper for free debt advice

The fee cannot be waived and there is no means testing for the application fee itself. Some local councils and charities offer budgeting loans or grants that may help cover the cost.

Who Can Declare Themselves Bankrupt?

Anyone who lives in England or Wales, or who has a business or property connection to England or Wales, can apply for bankruptcy. There is no minimum or maximum debt level required. However, bankruptcy is generally most appropriate when:

Your debts are more than the value of everything you own
You have no realistic way of repaying your debts within a reasonable time
Other debt solutions like an Individual Voluntary Arrangement (IVA) are not suitable for your situation
You need immediate protection from creditor action such as bailiffs or wage deductions

You do not need to be employed or unemployed. People from all financial backgrounds apply for bankruptcy. What matters is that your debts are genuinely unmanageable.

What Happens When You Declare Yourself Bankrupt?

Once your bankruptcy application is approved, several things happen:

An Official Receiver is appointed to manage your bankruptcy. They will contact you, usually by phone, to discuss your finances, assets, income, and spending. This is called a bankruptcy interview and it is designed to establish what you own and what you can afford to contribute towards your debts.

Your creditors must stop all collection activity. Letters, phone calls, bailiff visits, and legal action are all halted. This protection is one of the main reasons people choose bankruptcy when they are under pressure from multiple creditors.

Your assets are assessed. The Official Receiver will look at what you own, including property, vehicles, savings, and valuable items. Some assets are protected, including essential household items, tools needed for work, and a reasonable vehicle. Your home is more complicated and may need to be sold or your share realised, though this depends on your circumstances.

If you have surplus income after essential living costs, you may be asked to make monthly payments through an Income Payments Agreement (IPA) for up to three years.

How Long Does Bankruptcy Last?

Bankruptcy typically lasts 12 months from the date of the bankruptcy order. After this period, you are automatically discharged, meaning you are released from most of the debts included in your bankruptcy. You do not need to apply for discharge as it happens automatically.

However, some effects last longer. An IPA runs for three years if one is put in place. The bankruptcy remains on your credit file for six years from the date of the order. Your name appears on the Individual Insolvency Register during your bankruptcy and for three months after discharge.

In rare cases, the court can extend the bankruptcy period through a Bankruptcy Restrictions Order (BRO) if you have behaved dishonestly or recklessly. Extensions can last between 2 and 15 years.

What Debts Are Written Off in Bankruptcy?

Most unsecured debts are included in bankruptcy and written off upon discharge. These typically include:

Credit card debts
Personal loans and overdrafts
Catalogue debts and store cards
Utility bill arrears
Council tax arrears
Money owed to friends or family
Some benefit overpayments

Certain debts are not included and will survive bankruptcy. These include student loans, magistrates court fines, child maintenance arrears, debts arising from fraud, and some tax debts where fraud is involved.

Alternatives to Declaring Yourself Bankrupt

Bankruptcy is not the only option for dealing with serious debt. Before you apply, you should consider whether one of these alternatives might be better suited to your situation.

Individual Voluntary Arrangement (IVA)

An IVA is a formal agreement between you and your creditors to repay a proportion of your debts over five or six years. It is managed by a licensed insolvency practitioner and protects you from legal action while the arrangement is in place. IVAs work best when you have a regular income and can commit to monthly payments. At the end of the IVA, any remaining debt is written off.

Debt Relief Order (DRO)

A DRO is similar to bankruptcy but designed for people with lower levels of debt (under \u00a350,000), minimal assets (under \u00a32,000), and low disposable income (under \u00a375 per month). It costs \u00a390 and lasts 12 months, after which your debts are written off. A DRO is applied for through an authorised debt adviser, not directly.

Debt Management Plan (DMP)

A DMP is an informal arrangement where you make reduced monthly payments to your creditors based on what you can afford. It is not legally binding, so creditors can still chase you for the full amount, but many will agree to freeze interest and charges. Free DMPs are available through charities like StepChange and PayPlan.

County Court Administration Order (CCAO)

If your total debts are under \u00a35,000 and you have at least one County Court Judgment (CCJ) against you, you may be able to apply for a CCAO. This is a court-managed repayment plan where you make one monthly payment that is distributed to all your creditors. Administration orders are underused but can be effective for smaller debt levels.

The Impact of Bankruptcy on Your Life

Going bankrupt affects more than just your finances. You should be aware of the following before you apply:

Your credit rating will be seriously affected for at least six years. During this time, you will find it difficult to get credit, mortgages, or even some bank accounts. Some employers, particularly in financial services, check for bankruptcy and it could affect your job prospects.

If you are a homeowner, your property interest will form part of the bankruptcy estate. The trustee has up to three years to deal with your home. In some cases, the property must be sold. In others, someone else can buy out your share. If no action is taken within three years, your interest returns to you.

Certain professions have restrictions during bankruptcy. You cannot act as a company director, and some professional bodies (solicitors, accountants, financial advisers) may restrict or revoke your membership. You cannot obtain credit of \u00a3500 or more without telling the lender you are bankrupt.

Despite these restrictions, many people find that bankruptcy gives them relief from overwhelming stress and a genuine chance to rebuild. The 12-month period passes, the restrictions lift, and you can start again without the weight of unmanageable debt.

How to Apply: Step by Step

The application process to declare yourself bankrupt in England and Wales is straightforward:

Gather your financial information, including details of all debts, assets, income, and expenses
Complete the online application form on the GOV.UK website
Pay the \u00a3680 application fee
Submit the application to the Insolvency Service
Wait for an adjudicator to review your application (usually within 28 days)
If approved, a bankruptcy order is made and an Official Receiver is appointed

You do not need a solicitor or insolvency practitioner to apply. However, getting free debt advice from organisations like StepChange or MoneyHelper before applying is strongly recommended. They can help you understand whether bankruptcy is genuinely the right option for your circumstances.

Get Free Bankruptcy Advice Today

If you are considering whether to declare yourself bankrupt, do not make the decision alone. Free, confidential debt advice is available from qualified professionals who can review your full financial situation and help you understand all your options.

Visit our bankruptcy guides for more detailed information on every aspect of the process.

This page provides general information about bankruptcy in England and Wales. It is not financial advice. Your circumstances are unique, and you should seek professional debt advice before making any decisions about insolvency. Organisations like StepChange (0800 138 1111) and MoneyHelper (0800 138 7777) offer free, impartial advice.