How to Declare Bankruptcy in the UK

Updated for 2026

If your debts have become unmanageable, you may be considering whether to declare bankruptcy. For many people across England and Wales, bankruptcy offers a way to draw a line under overwhelming debt and make a fresh start. This guide explains the full process, the costs, what happens to your assets, and the alternatives you should consider before making a decision.

Bankruptcy is a formal insolvency process governed by the Insolvency Act 1986. It is not something to rush into, but for the right person in the right circumstances, it can provide genuine relief from debt.

Who Can Declare Bankruptcy?

Anyone who owes at least £5,000 and cannot pay their debts as they fall due can apply for bankruptcy in England and Wales. You do not need to be employed, own property, or have a minimum income. The process is open to individuals only, not limited companies or partnerships.

You can apply voluntarily through the online bankruptcy application service on GOV.UK. Alternatively, a creditor you owe £5,000 or more to can petition for your bankruptcy through the courts.

Before you apply, it is worth getting free debt advice. Organisations like StepChange and MoneyHelper can help you understand whether bankruptcy is genuinely the best route for your situation.

How to Declare Bankruptcy: The Application Process

Since 2016, you no longer need to attend court to declare bankruptcy. The entire process is handled online through the Insolvency Service’s adjudicator system.

Step 1: Complete the online application

Visit GOV.UK and fill in the application form. You will need to provide details of your income, outgoings, assets, and debts. Be honest and thorough. Providing false or incomplete information is a criminal offence.

Step 2: Pay the fee

The total cost to declare bankruptcy in 2026 is £680. This is made up of a £130 court fee and a £550 deposit paid to the Insolvency Service. You can pay by debit card, and in some cases it is possible to pay in instalments. Read our full guide on the cost of bankruptcy for more details.

Step 3: Adjudicator decision

An adjudicator at the Insolvency Service reviews your application. In most cases, a decision is made within 28 days. If the application is approved, you are made bankrupt and an Official Receiver is appointed to handle your case.

Step 4: Official Receiver interview

The Official Receiver will contact you, usually by telephone, to discuss your financial situation. They will ask about your income, expenses, and assets. Cooperation is essential throughout this stage.

What Happens When You Declare Bankruptcy?

Once your bankruptcy order is made, several things happen straight away:

Most of your debts are frozen. Creditors can no longer chase you for payment or add interest to the amounts owed.
Your name is added to the Individual Insolvency Register, which is a public record.
The Official Receiver takes control of your assets. Items needed for basic domestic living and tools of your trade are usually exempt.
Your bank account may be frozen temporarily. You should open a basic bank account beforehand if possible.
If you own property, it may be sold to pay creditors. Joint ownership does not protect the property entirely.

Bankruptcy typically lasts 12 months. After that period, you are discharged from your debts and can begin rebuilding your finances. Your bankruptcy will remain on your credit file for six years from the date of the order.

Certain debts are not written off by bankruptcy. These include student loans, court fines, child maintenance arrears, and debts arising from fraud. Our guide on debts not written off by bankruptcy covers this in detail.

Income Payments During Bankruptcy

If your income is higher than your reasonable household expenses, the Official Receiver may ask you to make monthly contributions through an Income Payment Agreement (IPA) or Income Payment Order (IPO). These payments typically last three years and are calculated based on your surplus income.

Read more about payments from income during bankruptcy to understand how this works in practice.

Bankruptcy Restrictions

While bankrupt, there are certain restrictions you should be aware of:

You cannot borrow more than £500 without telling the lender you are bankrupt.
You cannot act as a company director or be involved in company management without court permission.
You cannot trade under a different name without disclosing your bankruptcy.
Certain professions may be affected, including solicitors, accountants, and some financial services roles.

If you fail to cooperate with the Official Receiver or if your conduct is found to be dishonest, a Bankruptcy Restriction Order (BRO) can extend these restrictions for up to 15 years.

Alternatives to Declaring Bankruptcy

Bankruptcy is not the only option for dealing with serious debt. Depending on your circumstances, one of the following alternatives may be more appropriate:

Individual Voluntary Arrangement (IVA)

An IVA is a formal agreement between you and your creditors to repay a portion of your debts over a fixed period, usually five or six years. It is managed by a licensed insolvency practitioner. An IVA can protect your home and may be suitable if you have a regular income.

Debt Relief Order (DRO)

A DRO is designed for people with debts under £50,000, minimal assets (under £2,000), and a low surplus income (under £75 per month). It costs just £90 and lasts 12 months. If your circumstances stay the same, your debts are written off at the end.

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 flexible but not legally binding, so creditors can still take action against you.

County Court Administration Order (CCAO)

A CCAO may be an option if your total debts are under £5,000 and you have at least one county court judgment against you. The court sets a single monthly payment that is distributed to your creditors.

For a full comparison, visit our alternatives to bankruptcy guide or explore our bankruptcy alternatives page.

Is Declaring Bankruptcy Right for You?

Deciding to declare bankruptcy is a significant step. It suits people who have no realistic way of repaying their debts within a reasonable timeframe. If you have few assets, limited income, and your debts are causing serious stress, bankruptcy could give you the clean break you need.

On the other hand, if you own a home, have a professional career that would be affected, or could manage your debts through an IVA or DMP, it may be worth exploring those routes first.

Everyone’s situation is different. The key is getting the right information before committing to any course of action.

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