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Important Considerations and Restrictions

Updated for 2026

Before applying for bankruptcy, it is important to understand the bankruptcy restrictions that come with it. Bankruptcy is not something to enter into lightly, and the limitations below could affect your home, your job and your ability to get credit. This page provides general information to help you understand what to expect.

Bankruptcy Restrictions on Privacy

Your bankruptcy is entered in the Individual Insolvency Register and is advertised in The Gazette, the official Government publication for public notices.

Loss of Assets

You can lose assets of value, including your home or your share in it if jointly owned. For more detail on how this works, see our guide to bankruptcy and your property.

Anything of worth which can easily be sold to raise money to pay into the bankruptcy could be taken from you.

Exceptions include:-

  • Household items essential for basic domestic needs, such as clothes, furniture and a TV.
  • A modest vehicle depending on circumstances. See our guide to bankruptcy and your car.
  • Items needed for trade or employment, such as tools and computing equipment.
  • Money held in approved pension funds (see below).
  • Money obtained from a student loan, if a balance of the loan remains payable.

Pensions held in approved schemes are generally protected under the Welfare Reform and Pensions Act 1999. However, if you are over the minimum pension age (currently 55, rising to 57 from April 2028), a trustee in bankruptcy may apply to court for an income payments order against your pension income. For a fuller explanation, see our bankruptcy and pensions guide.

Impact on Business Affairs

Any business you have will almost certainly be closed down, and an assessment made as to whether it could be sold for the benefit of your creditors.

You may not be, or act as, the director of a limited company, or be directly or indirectly involved in the formation, running and management of a limited company, without the permission of the court.

You can continue to trade as a sole trader, but subject to the restrictions imposed by the Official Receiver during your bankruptcy period.

Impact on Employment

Bankruptcy could affect your employment. In some jobs, a record of bankruptcy may lead to dismissal, demotion or other issues.

Your employer or any potential employer may be unwilling to employ someone who has been bankrupt in a role of responsibility involving finance or the handling of money.

Some professional membership bodies do not allow undischarged bankrupts to remain members.

You cannot do any of the following jobs while bankrupt:

  • Charity trustee
  • Company director (without court permission)
  • Insolvency Practitioner
  • Justice of the Peace
  • Member of Parliament

If you work in the following industries, you should check whether bankruptcy will have any impact on your job:

  • Armed forces
  • Anything involving cash handling, for example banking, payroll or security
  • Financial services, for example accountant, mortgage broker, stockbroker or financial adviser
  • Law, for example solicitor or legal executive
  • Medicine, for example GP or dentist
  • Property, for example estate agent or letting agent
  • Police
  • Pub licensee

Getting Credit When Bankrupt and After

You may not obtain credit of £500 or more in total without disclosing your bankrupt status. This includes ordering goods on credit.

Entering into bankruptcy has a negative impact on your credit rating for six years, which is how long information is retained by the credit reference agencies. For guidance on managing your finances after bankruptcy, see our page on bankruptcy and bank accounts.

When applying for a mortgage you may be asked if you have ever been made bankrupt.

Becoming bankrupt is not a criminal offence. However, breaching the restrictions described above could lead to criminal proceedings.

Bankruptcy Restriction Orders (BRO)

If the Trustee considers you to be blameworthy, reckless or dishonest in your financial affairs and this contributed to your bankruptcy, a Bankruptcy Restriction Order can be made against you. This prolongs the above restrictions and adds further limitations to your activities.

Considering Alternatives?

Bankruptcy is not the only option for dealing with unmanageable debt. Depending on your circumstances, a Debt Relief Order (DRO), an Individual Voluntary Arrangement (IVA) or a Debt Management Plan (DMP) could be worth looking into. See our full guide to alternatives to bankruptcy.

This page provides general information only and should not be taken as financial advice. If you are unsure about your options, consider speaking to a qualified debt adviser.