BANKRUPTCY: THE NO-NONSENSE GUIDE

Listen up — bankruptcy’s a beast, but it’s quick. Just 1 year to wipe your slate clean. Most debts? Gone. Student loans? Nope, they stay. This is your chance to reset, rebuild, and dominate your finances again.

This guide lays it all out so you can:

• Decide if bankruptcy is your power move.
• Know exactly what hits after you file.

Wanna start fast? Look for the orange links — quick hits for a fast overview.

Common Questions – What You Need to Know

Worried about losing your house? Your car? Your job? Mortgage prospects? Who finds out? Here’s the lowdown:

• What debts get wiped?
• If you’re self-employed, can you keep hustling? Mostly yes — hit up Business Debtline for pro tips.
• Will your bankruptcy get approved? Usually.
• Living abroad and want to go bankrupt? We got you.

• Can you spend backdated benefits? Maybe — check details.
• What’s a Bankruptcy Restriction Order? Rare, but know if it’ll affect you.
• No need to report your post-bankruptcy spending. Keep your privacy.

• Will the Official Receiver take your stuff? Most don’t lose anything.
• Can they control your life? Nope — no forced moves or job bans.

• Your pension is safe. Chill.
• New partner’s house? Safe too.

• Can you get a mortgage after? Yes, but it takes time.

Myth Busting

The internet’s full of BS about bankruptcy. Some folks push IVAs just to make a quick buck. Don’t get played.

One reader waited too long, scared of the noise. Her story? Honest and real: “Why I had to go bankrupt & how it went.”

Prepping to Go Bankrupt

Know the game plan:

• How to handle fees — you can pay in chunks.
• Filling out the app — long, but doable.
• Bank accounts — some are cool with your status, some not.
• Checklist to keep you sharp.

After You File

You’ll talk with the Official Receiver (usually phone). They check if you’ve got extra cash to pay back (most don’t).

If you do pay, it’s flexible, lasts 3 years max.

• Who to tell (no one mandatory, but sometimes smart).
• Forgot a debt? Usually no problem.
• New job or overtime? Depends on your payment plan.
• Repossession rules — know your rights.
• Inheriting cash? See how it affects you.
• Will redundancy money get taken? Check details.

When It Ends

After 1 year — bankruptcy’s done. Your debts? Gone. If paying, keep going for 3 years max.

Credit repair starts months after discharge but expect the record to stick around for 6 years.

Alternatives to Bankruptcy

• IVAs — for people who can’t bankrupt or want to protect assets. Longer, costlier.
• Debt Management Plans — slower, less clean.
• Debt Relief Orders — cheaper, quicker if you qualify.
• Selling your house — maybe keep it if no equity, or someone buys your share.

Even if bankruptcy’s the right move, get advice — check our “Where to Get Help” post.

Creditor Threatening Bankruptcy?

If a creditor hits you with a Statutory Demand, don’t ignore it. HMRC and councils can make you bankrupt for tax debts. Legal advice is a must — hit Citizens Advice or a solicitor ASAP.