Declaring Yourself Bankrupt in the UK

Updated for 2026

If your debts have become unmanageable and you cannot see a realistic way to repay them, declaring yourself bankrupt could be the fresh start you need. Bankruptcy is a formal insolvency process that writes off most of your unsecured debts, giving you legal protection from creditors. This guide explains how the process works in England and Wales in 2026, what it costs, what happens to your assets, and what alternatives you should consider before making your decision.

What Does Declaring Yourself Bankrupt Actually Mean?

When you declare yourself bankrupt, you are applying to the court for a bankruptcy order. In England and Wales, this is done through an online application to the Insolvency Service via the GOV.UK bankruptcy application portal. The process is sometimes called voluntary bankruptcy because you are choosing to apply rather than being forced into it by a creditor.

Once your application is approved, an official receiver is appointed to manage your case. They will assess your financial situation, look at your income and assets, and decide what needs to happen. Most of your unsecured debts are included in the bankruptcy order, meaning creditors can no longer chase you for payment.

Bankruptcy typically lasts 12 months. After that period, you are discharged and the remaining debts covered by the order are written off. However, certain debts are not included, such as student loans, child maintenance, court fines, and debts arising from fraud.

How Much Does It Cost to Go Bankrupt in 2026?

The current fee for declaring yourself bankrupt in England and Wales is \u00a3680. This is a single payment made when you submit your online application. There is no court hearing involved for voluntary applications, which makes the process more straightforward than it used to be.

If you cannot afford the full fee upfront, you may be able to pay in instalments. The Insolvency Service allows payments to be spread, though your application will not be processed until the full amount has been paid.

Some charities and debt advice organisations can help with the application fee in cases of extreme hardship. It is worth speaking to StepChange or MoneyHelper before applying.

The Bankruptcy Application Process

The application is completed online through the Insolvency Service website. You will need to provide details of your debts, income, expenses, and assets. Here is what to expect:

You fill in the online form with your personal details, a list of everyone you owe money to, your monthly income and spending, and details of any property, vehicles, or savings you own. You then pay the \u00a3680 fee and submit the application.

An adjudicator reviews your application. This is not a judge sitting in a courtroom. It is a member of the Insolvency Service staff who checks whether bankruptcy is appropriate in your case. Most decisions are made within a few days.

If the application is approved, the official receiver contacts you. They may arrange a telephone interview to discuss your situation in more detail. You are legally required to cooperate fully and provide honest information.

What Happens to Your Assets?

One of the biggest concerns people have before declaring yourself bankrupt is what happens to their belongings. The official receiver will look at everything you own and decide what needs to be sold to repay creditors.

Everyday household items, clothing, and tools needed for work are usually protected. Your car may be kept if it is of modest value and you need it for work or essential travel. However, items of significant value, luxury goods, and investments can be sold.

If you own property, the situation is more complex. Your share of any property you own becomes part of the bankruptcy estate. The official receiver or a trustee may seek to sell the property, or your share of it, to raise funds for creditors. There are protections for family homes, but they are not absolute. You can read more about this in our guide to bankruptcy and your property.

How Bankruptcy Affects Your Credit and Daily Life

Bankruptcy has a serious impact on your credit rating. The bankruptcy order is recorded on the Individual Insolvency Register, which is public. It also appears on your credit file for six years from the date of the order.

During the 12 months you are bankrupt, there are restrictions on what you can do. You cannot borrow more than \u00a3500 without telling the lender you are bankrupt. You cannot act as a company director or be involved in managing a company without court permission. You cannot trade under a different name without disclosing your bankruptcy.

After discharge, many of these restrictions are lifted. However, rebuilding your credit takes time. Some people find it helpful to use a basic bank account and a prepaid credit card to start building a new credit history gradually.

Your employment may also be affected. Certain professions, including roles in financial services, law, and some public sector positions, have restrictions on employing people who are bankrupt or who have been bankrupt recently. Check your employment contract and any professional body rules before proceeding. Our guide to bankruptcy restrictions covers this in detail.

Alternatives to Declaring Yourself Bankrupt

Bankruptcy is not the only option for dealing with serious debt. Before you apply, consider whether one of these alternatives might work better for your circumstances:

Individual Voluntary Arrangement (IVA)

An IVA is a formal agreement between you and your creditors to repay a portion of your debts over a set period, usually five or six years. It is managed by a licensed insolvency practitioner. An IVA lets you keep your home and other assets in most cases, and creditors cannot take further action against you once the arrangement is in place. Learn more in our alternatives to bankruptcy guide.

Debt Relief Order (DRO)

A DRO is designed for people with relatively low levels of debt (under \u00a330,000), minimal assets, and a low disposable income. It freezes your debts for 12 months, and if your circumstances have not improved by the end of that period, the debts are written off. There is no application fee if you apply through an approved intermediary.

Debt Management Plan (DMP)

A DMP is an informal arrangement where you make reduced monthly payments to your creditors through a debt management company. It is not legally binding, which means creditors can still take action against you, but many will agree to freeze interest and charges while you are on the plan. A DMP can work well for people who have some spare income each month but cannot afford their full repayments.

County Court Administration Order (CCAO)

If your total debts are under \u00a35,000 and you have at least one county court judgment against you, a CCAO allows you to make a single monthly payment to the court, which distributes it among your creditors. This is a less common option but can be effective for smaller debt levels. Read our CCAO guide for full details.

Who Can Help You Decide?

Making the decision to go bankrupt is significant, and you should not rush into it without getting proper advice. Free, impartial debt advice is available from several organisations:

StepChange Debt Charity offers a comprehensive online debt advice tool and telephone helpline. MoneyHelper, the government-backed service, provides guides and a directory of free advice providers. Citizens Advice can also help you understand your options.

You can also explore our bankruptcy guides section for detailed information on every aspect of the process, from petitions to annulment.

Is Declaring Yourself Bankrupt the Right Choice?

Bankruptcy works best when you have significant unsecured debts that you genuinely cannot repay, limited assets, and you want a clean break within 12 months. It is less suitable if you own a home with equity, work in a restricted profession, or have debts that would not be covered by a bankruptcy order.

The key question is whether you can see any realistic way to repay your debts within a reasonable timeframe. If you cannot, and the alternatives above do not fit your situation, bankruptcy may genuinely be your best path forward.

Important: The information on this page is for general guidance only and does not constitute financial or legal advice. Your situation is unique, and you should seek independent advice from a qualified professional or free debt advice service before making any decisions about bankruptcy or other debt solutions.

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