Bankruptcy – Frequently Asked Questions

This section answers the most commonly asked questions about bankruptcy. Remember that if you need to understand more about your own debt problems.

It is important to make sure you understand what the implications of bankruptcy are and what other options are available. These options include the Individual Voluntary Arrangement (IVA), which was introduced by the government in 1986 to help people who would otherwise face bankruptcy.

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1. How does the bankruptcy process work?
2. How much does it cost to go bankrupt?
3. Where is the Bankruptcy Order made?
4. What happens during the bankruptcy hearing?
5. Who is responsible for dealing with bankruptcy cases?
6. What do I have to do if I’m made bankrupt?
7. What are the effects of bankruptcy?
8. How does the bankruptcy process work?

If you want to declare yourself bankrupt you have to start the process by filing a Bankruptcy Petition (called a Debtor’s Petition). Your creditors can file a Bankruptcy Petition (called a Creditor’s Petition) against you if you owe them more than £750.

Once the bankruptcy petition has been filed, a court date will be set for the initial hearing to see if a Bankruptcy Order should be made.

Once a Bankruptcy Order has been made, you will be declared bankrupt. See more on the bankruptcy process.

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You will probably have to pay three different fees to go bankrupt, at a total cost of up to £502. These fees are:

• a Court Fee of £150 (sometimes waived, e.g. if you are on Income Support)
• the Official Receiver’s Deposit of £345
• a fee of £7 to swear the statement of affairs (not payable if the hearing is in a County Court).

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The Bankruptcy Order is made at the same court where the Bankruptcy Petition was filed. Bankruptcy Petitions are normally filed at a county court near to where you live and work or at the High Court.

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At this hearing one of the following things can happen:

• proceedings are delayed because more information is needed by the court
• the Bankruptcy Petition is dismissed
• an Insolvency Practitioner is appointed to set up an Individual Voluntary Arrangement instead
• a Bankruptcy Order is made and you are declared bankrupt.

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The Official Receiver, who is a civil servant and officer of the court, is responsible for the administration of bankruptcies. The Official Receiver usually acts as a trustee of the bankrupt’s estate and is responsible for investigating the bankrupt’s financial affairs.

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Once a Bankruptcy Order has been made, you are obliged to give the Official receiver information about your financial affairs. This includes handing over your assets, bank statements and insurance policies. If you are made bankrupt, you are not allowed to obtain credit of over £500 without disclosing the fact that you are bankrupt. You are also not allowed to continue using bank or building society accounts and you can’t make direct payments to your creditors.

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The Trustee controls all of your assets during bankruptcy, including your home. You won’t be able to obtain credit of more than £500 without disclosing your status and there are restrictions on your business activities. Certain public offices are closed to you. See the page on effects of bankruptcy for more. Restrictions end when the bankruptcy is terminated
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The fact that you were made bankrupt will be registered with credit reference agencies and will stay or your file for at least six years. After this period you might still have to declare that you were bankrupt, especially if you apply for a mortgage.

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Further reading
Bankruptcy | Bankruptcy process | UK Bankruptcy Law | Avoid Bankruptcy | Effects of Bankruptcy | IVA an Alternative to Bankruptcy | Disadvantages of Bankruptcy | Bankruptcy FAQs