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How to Declare or File for Bankruptcy in the UK (Step-by-Step) - Fleximize

How to Declare or File for Bankruptcy in the UK (Step-by-Step)

Understand how to apply, what it affects and what support is available.

By Kate Josselyn

If you’re applying for bankruptcy, you're likely under serious financial pressure.

Bankruptcy is a legal process. It can clear many debts. But it also has long-term effects on your credit, assets and future finances.

This guide explains how to go bankrupt in the UK, step by step. It focuses on England and Wales, where the process is handled online.

If you’re unsure, always seek free debt advice before making a decision.

What does it mean to go bankrupt?

Bankruptcy is a legal process for people who cannot pay their debts.

It means formally applying to be declared bankrupt through the UK government.

When you're made bankrupt:

Bankruptcy vs company insolvency

This is important.

Bankruptcy applies to:

Limited companies do not go bankrupt. A company enters liquidation or administration instead.

If you're a director of a limited company, you cannot declare the company bankrupt. The business must follow corporate insolvency rules.

How to declare bankruptcy in England and Wales

In England and Wales, the process is handled online through the official government portal on GOV.UK – you don’t usually go to court.

Here is how to file for bankruptcy step by step:

Step 1: Check you have no better option

Before applying, consider alternatives like:

You can get free advice from:

Bankruptcy is serious and should usually be a last resort.

Step 2: Apply online

If you decide to go ahead, you must complete an online bankruptcy application.

You will need to provide:

You're applying to an official known as the Adjudicator. They review your application and decide whether to make a bankruptcy order.

Step 3: Pay the bankruptcy fee

It currently costs £680 to apply for bankruptcy in England and Wales.

This is made up of:

You can pay in instalments before submitting your application.

If you're searching for bankruptcy funding, it’s important to know you cannot usually borrow to pay the fee once you're insolvent. Debt charities may be able to advise you on support options.

Your application will not be submitted until the full £680 is paid.

Step 4: The decision

Once submitted, the Adjudicator normally makes a decision within 28 days.

If approved:

You will then be contacted for more information about your finances.

Filing for bankruptcy in London vs the rest of the UK

The process is the same across England and Wales.

There’s no special London court process for most applications. It is all done online through the national system.

However, if a creditor challenges your case, you may need to attend a local court hearing in your area, including in London.

If you live in Scotland or Northern Ireland, the process is different and handled under separate rules.

Submitting a voluntary bankruptcy petition

When you apply yourself, this is known as a voluntary bankruptcy petition.

In simple terms, you're choosing to declare yourself bankrupt because you cannot pay your debts.

Voluntary petition (debtor’s petition)

This happens when:

If you're looking to declare bankruptcy, this is the route you will usually take.

Creditor’s bankruptcy petition

A creditor (someone you owe money to) can also force you into bankruptcy.

This usually happens if:

In this case:

This is more stressful and may involve court hearings.

What happens to your assets?

When you file for bankruptcy, your assets are reviewed by a trustee.

Your home

If you own property:

Your car

You may lose your car if it’s valuable.

However, you may be allowed to keep it if:

Bank accounts

Your bank accounts are usually frozen at first.

You may be allowed to open a basic bank account during bankruptcy.

How bankruptcy affects your credit

Bankruptcy stays on your credit file for six years.

During this time:

If you're bankrupt, you must not borrow more than £500 without telling the lender about your bankruptcy.

You also cannot:

Breaking these rules is a criminal offence.

How long does bankruptcy last?

Most bankruptcies last 12 months.

After this, you're usually discharged automatically.

However:

Your credit file will still show the bankruptcy for six years.

Alternatives to bankruptcy

Before deciding how to go bankrupt, it’s worth considering your options.

Individual Voluntary Arrangement (IVA)

An IVA is a formal agreement to repay part of your debts over time, usually five years.

If you stick to the plan, remaining debt may be written off.

Debt Relief Order (DRO)

A DRO is for people with:

It freezes debts for 12 months. If your situation does not improve, they are written off.

In summary

If you’re considering declaring bankruptcy, you're likely under huge pressure.

Bankruptcy can:

But it can also:

If you're a sole trader, bankruptcy affects you personally. If you run a limited company, the business cannot go bankrupt – it must follow corporate insolvency procedures instead.

If you need support, speak to a regulated debt charity such as StepChange Debt Charity or Business Debtline for free, confidential advice.

Taking action early can give you more options – and less stress.

Your common questions answered

Bankruptcy is a legal process that helps people who can’t pay their debts.

When you file for bankruptcy, a court steps in to manage your debts, often by selling your assets to pay off what you owe. It's a way to get a fresh start if you’re overwhelmed by debt.

Filing for bankruptcy can be a good way to start over if you have no other options to pay your debts. It can clear many debts, giving you a chance to rebuild your finances.

However, it can also have serious effects, like damaging your credit.

When you file for bankruptcy in the UK, a court reviews your case and may declare you bankrupt. A trustee is appointed to manage your bankruptcy, which might include selling your assets to pay your debts. You’ll also face restrictions on your financial activities during the bankruptcy process.

Yes, filing for bankruptcy can significantly hurt your credit.

Bankruptcy stays on your credit report for six years, making it harder to get loans, credit cards, or even some jobs. However, it also gives you a chance to rebuild your credit over time.

Bankruptcy can clear most types of debt, including what you owe to HMRC.

However, there are some exceptions, like certain fines and penalties, which may not be wiped out through personal bankruptcies.

You might lose your car when you file for bankruptcy in the UK if it's worth more than a certain amount. The trustee could sell it to pay your debts. However, if your car is essential for work or is of low value, you may be allowed to keep it.

Bankruptcy can clear many debts, but not all.

Debts like student loans, child support, and some fines usually aren’t cleared. It's important to understand what debts are covered before you file for bankruptcy.

After filing for bankruptcy, your credit will be very low.

However, you can start rebuilding your credit by paying bills on time and being responsible with new credit. It takes time, but good credit can be achieved again.

In the UK, the term bankruptcy specifically applies to individuals, not companies. For businesses, other insolvency procedures are used. Here are the main types:

  • Bankruptcy is for people who cannot pay their debts. It involves the sale of assets to repay creditors and usually lasts for 12 months.
  • An Individual Voluntary Arrangement (IVA) is an alternative to bankruptcy where you pay back what you can afford over a fixed period, usually five years.
  • A Debt Relief Order (DRO) is for people with lower debts, little income, and few assets. It freezes your debts for a year, and if your situation hasn’t changed after that, the debts are wiped out.

For companies, insolvency procedures like liquidation or administration are used instead of bankruptcy.

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