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Go bankrupt in the UK, a guide to bankruptcy and debt solutions for 2026

Go Bankrupt in the UK: Your Complete 2026 Guide

If your debts have become unmanageable, choosing to go bankrupt could give you a fresh financial start. Bankruptcy is a legal process that writes off most of your unsecured debts, usually within 12 months. This guide covers everything you need to know about going bankrupt in England and Wales in 2026, including costs, eligibility, consequences, and the alternatives you should consider first.

What Does It Mean to Go Bankrupt?

Going bankrupt means you formally declare that you cannot repay your debts. Once a bankruptcy order is made, an Official Receiver is appointed to manage your financial affairs. Your eligible debts are written off, but your assets may be sold to repay creditors where possible.

Bankruptcy in England and Wales is handled through the Insolvency Service, a government agency. You apply online through the GOV.UK bankruptcy application service.

Bankruptcy typically lasts 12 months, after which you are discharged and your qualifying debts are written off. However, certain debts cannot be included, such as student loans, child maintenance, court fines, and debts obtained through fraud.

Who Can Go Bankrupt in the UK?

Anyone who owes money they cannot repay can apply for bankruptcy. There is no minimum or maximum debt level required. However, bankruptcy is generally most suitable if:

  • You owe significant unsecured debts (credit cards, personal loans, overdrafts, catalogue debts)
  • You have little or no spare income after essential living costs
  • You do not own property with significant equity
  • You cannot realistically repay your debts within a reasonable timeframe
  • Other debt solutions such as an IVA or DRO are not suitable

If your total debts are under £30,000 and disposable income under £75/month, a Debt Relief Order may be more appropriate. It costs just £90.

How Much Does It Cost to Go Bankrupt?

The cost to go bankrupt in England and Wales is £680. This is a single fee paid to the Adjudicator when you submit your online application.

Breakdown of bankruptcy costs:

  • Application fee: £680 (paid online)
  • No court attendance required
  • No solicitor fees necessary
  • Free debt advice from StepChange and MoneyHelper

The Bankruptcy Application Process

Applying to go bankrupt is done entirely online:

  1. Gather your financial information
  2. Complete the application at GOV.UK
  3. Pay the £680 fee
  4. An Adjudicator reviews within 28 days
  5. Bankruptcy order is made
  6. Cooperate with the Official Receiver
  7. Discharged after 12 months

The Official Receiver will contact you for an interview. Failing to cooperate can result in a Bankruptcy Restrictions Order.

What Happens to Your Assets?

The Official Receiver assesses your assets. Protected items include essential household goods, tools for work (up to £1,000), and a reasonable vehicle if needed for employment.

Assets that may be sold: property, vehicles with significant value, savings, investments, luxury items, and business interests.

If you own your home, the trustee has up to three years to deal with your interest. Read our property guide for details.

Income Payments During Bankruptcy

If you have surplus income, the Official Receiver can set up an Income Payment Agreement (IPA). These require monthly payments for up to three years, even after discharge.

Only genuine surplus income is taken. Payments should leave you with enough to cover reasonable living costs.

How Does Bankruptcy Affect Your Credit?

Bankruptcy appears on your credit file for six years. During this time:

  • Obtaining credit, mortgages, or loans will be very difficult
  • You must declare bankruptcy when applying for credit over £500
  • Your name appears on the Individual Insolvency Register
  • Some bank accounts may be restricted

After discharge, rebuilding credit is possible through careful financial management.

Alternatives to Going Bankrupt

Before deciding to go bankrupt, consider these alternatives:

Individual Voluntary Arrangement (IVA)

An IVA is a legally binding agreement to repay a portion of your debts over five or six years.

Debt Relief Order (DRO)

A DRO is suitable for debts under £30,000 with minimal assets and income. Costs £90.

Debt Management Plan (DMP)

A DMP is an informal agreement to repay debts at a reduced rate.

County Court Administration Order (CCAO)

A CCAO is available for total debts under £5,000 with at least one CCJ.

Get Free Bankruptcy Advice

Free, impartial debt advice is available from:

Frequently Asked Questions

How long does bankruptcy last?

Typically 12 months, after which most debts are written off.

Can I keep my home?

It depends on equity. See our property guide.

Will bankruptcy affect my job?

Most jobs are unaffected, but some professions have restrictions.

Can I go bankrupt more than once?

Yes, but expect stricter scrutiny.

This guide 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. Bankruptcy rules differ in Scotland and Northern Ireland.

Ready to Take the Next Step?

If you are considering bankruptcy or need help understanding your options, request a free callback from our team.

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