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How to go bankrupt in the UK - understanding your debt relief options

How to Go Bankrupt in the UK | 2026 Guide

Updated for 2026

If you are struggling with debt and wondering how to go bankrupt, you are not alone. Thousands of people across England and Wales apply for bankruptcy each year as a way to deal with debts they cannot repay. Bankruptcy can offer a genuine fresh start, but it is a serious step with lasting consequences. Before you commit to the process, it is worth understanding exactly what is involved, what it costs, and whether a different debt solution might suit your circumstances better.

This guide covers everything you need to know about going bankrupt in 2026, including the application process, costs, eligibility, and the alternatives available to you.

How to Go Bankrupt in England and Wales

Bankruptcy in England and Wales is a formal insolvency process. It is designed for people who owe at least £5,000 and cannot realistically repay what they owe. When you go bankrupt, most of your debts are written off, usually within 12 months. In return, your assets may be sold to repay creditors, and there are restrictions on what you can do during the bankruptcy period.

Since 2016, bankruptcy applications in England and Wales are made online through the Insolvency Service’s online portal. You no longer need to attend court. The process is handled by an adjudicator who reviews your application and decides whether to make you bankrupt.

The Application Process

To apply, you will need to:

  • Complete the online application form with details of your income, assets, and debts
  • Pay the application fee of £680 (as of 2026)
  • Provide supporting documents if requested by the adjudicator
  • Wait for the adjudicator’s decision, which usually takes a few days

Once your application is approved, you are officially bankrupt. An Official Receiver is appointed to manage your case. They will review your finances and decide whether any of your assets need to be sold.

What Happens When You Go Bankrupt?

Going bankrupt has immediate effects on your finances and your daily life. Understanding these consequences is essential before you decide to apply.

Your Debts

Most unsecured debts are included in your bankruptcy. This means credit cards, personal loans, overdrafts, catalogue debts, and utility arrears can all be written off. However, some debts survive bankruptcy, including student loans, child maintenance arrears, court fines, and debts obtained through fraud. For a full list, see our page on debts not written off by bankruptcy.

Your Assets

The Official Receiver may sell assets to repay your creditors. This can include property, vehicles worth more than a reasonable amount, savings, and investments. Everyday household items and tools needed for work are usually protected. If you own your home, it could be at risk, although there are options to protect it in some cases. Read more about bankruptcy and your property and bankruptcy and your car.

Your Income

If you have surplus income after covering essential living costs, you may be asked to make an Income Payment Agreement (IPA). These payments typically last for three years and go towards repaying your creditors.

Restrictions During Bankruptcy

While bankrupt, you cannot borrow more than £500 without telling the lender about your bankruptcy. You cannot act as a company director or be involved in managing a company. You may also face restrictions on certain professional roles. These restrictions usually end when you are discharged, normally after 12 months.

How Much Does It Cost to Go Bankrupt?

The total cost of bankruptcy in 2026 is £680. This is the application fee paid to the Insolvency Service when you submit your online application. There are no court fees on top of this.

If you cannot afford the full fee upfront, you may be able to pay in instalments. Some debt charities, such as StepChange, can help you budget for the fee or explore whether other options might be more suitable.

It is worth comparing this cost against the fees associated with other debt solutions. An Individual Voluntary Arrangement (IVA), for example, often involves fees of several thousand pounds spread across the life of the arrangement, while a Debt Relief Order costs just £90.

Alternatives to Going Bankrupt

Bankruptcy is not the only way to deal with serious debt. Depending on your circumstances, one of the following alternatives might be a better fit.

Individual Voluntary Arrangement (IVA)

An IVA is a legally binding agreement between you and your creditors. You make affordable monthly payments over a period of five to six years, and any remaining debt is written off at the end. An IVA can protect your home and is managed by a licensed insolvency practitioner. It is suitable if you have a regular income and debts of £6,000 or more.

Debt Relief Order (DRO)

A DRO is designed for people with low income, few assets, and debts under £30,000. It freezes your debts for 12 months, and if your situation has not improved by the end of that period, the debts are written off entirely. The application fee is £90, making it a much cheaper option than bankruptcy. You apply through an approved intermediary, often a debt adviser at a charity like MoneyHelper.

Debt Management Plan (DMP)

A Debt Management Plan is an informal arrangement where you make reduced payments to your creditors based on what you can afford. It is not legally binding, which means creditors are not obliged to accept it, but many do. A DMP does not write off any debt, so you repay everything you owe, just at a slower pace. Free DMP providers include StepChange and PayPlan.

County Court Administration Order (CCAO)

A County Court Administration Order is available if you have at least one County Court Judgment (CCJ) against you and your total debts are under £5,000. The court sets up a single monthly payment that is distributed among your creditors. A CCAO is a formal, court-supervised process, and it can include a composition order that writes off a portion of your debt.

For a detailed comparison of all your options, visit our alternatives to bankruptcy page or our bankruptcy alternatives guide.

Is Going Bankrupt the Right Choice for You?

Deciding whether to go bankrupt depends entirely on your individual circumstances. Bankruptcy may be right for you if:

  • You owe at least £5,000 and have no realistic way of repaying it
  • You do not own significant assets (particularly property with equity)
  • You want a relatively quick resolution, with discharge usually after 12 months
  • You are not in a profession that restricts bankrupts (such as solicitor, accountant, or financial adviser)

On the other hand, bankruptcy might not be the best route if you own your home, have a high income, or work in a profession with restrictions on insolvency. In those cases, an IVA or DMP could be a better option.

If you are unsure, speaking to a qualified debt adviser is the best first step. Free advice is available from StepChange, MoneyHelper, and Citizens Advice.

You can also use our bankruptcy eligibility guide to understand whether bankruptcy suits your situation, or read our full guide on the bankruptcy means test to see if you qualify.

Your Credit Rating and Life After Bankruptcy

Bankruptcy stays on your credit file for six years from the date of the bankruptcy order. During this time, you will find it difficult to obtain credit, mortgages, or certain financial products. However, many people find that their credit score begins to recover well before the six-year mark, especially if they manage their finances carefully after discharge.

Once discharged (normally after 12 months), most of the restrictions are lifted. You can apply for credit, start a business, and move forward financially. The bankruptcy will remain on the Individual Insolvency Register for the duration, but it is removed once the period ends.

For many people, the fresh start that bankruptcy provides far outweighs the short-term impact on their credit score.

Disclaimer: The information on this page is for general guidance only and does not constitute financial advice. Every person’s debt situation is different. We recommend speaking to a qualified debt adviser before making any decisions about bankruptcy or other debt solutions. Free, impartial advice is available from the Insolvency Service, StepChange, and MoneyHelper.

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Not sure whether bankruptcy is the right option? Our team can help you understand your choices and find the best solution for your situation. Request a free, no-obligation callback today.

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