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Home > Debt Solutions > Bankruptcy FAQs

Bankruptcy FAQs

We’ve answered some of the most common FAQs about bankruptcy. This should clear up any confusion you have and help you to understand the debt solution a bit better.

Saying this, we still strongly recommend that you get qualified legal and financial advice before you make any decisions.

BankruptcyFaqs

What if my personal circumstances change during bankruptcy?

During bankruptcy, you will be required to tell your Trustee – the person in charge of your bankruptcy – about any changes to your financial circumstances.

If your circumstances change for the better, you might have to start paying into an Income Payment Agreement (IPA) or Income Payments Order (IPO). Or if you’ve already got an IPA/IPO, you might have to increase what you pay into this. And if you get any money through a windfall or inheritance before the end of your bankruptcy, you might have to pay this towards your creditors too.

If you don’t tell your Trustee about changes to your circumstances, your bankruptcy may last longer.

How much does bankruptcy cost?

The total fee to go bankrupt in England and Wales is £680.

This is made up of the Official Receiver’s fee of £550 and the application fee of £130. You can pay this fee online in instalments if you can’t afford to pay it in one go. However, your bankruptcy application will not be processed until you’ve paid the full fee.

How does bankruptcy affect my credit rating?

Bankruptcy will appear on your credit file for six years after the date you first start it. If you apply for credit while it’s still on your credit history, lenders might be more likely to reject you. Or if they accept you, this might be at a higher rate of borrowing.

It’s also important to be aware that some lenders will ask you if you have ever been made bankrupt when you apply. As a result, bankruptcy could have an impact on your ability to get credit for a substantial period of time.

How long does bankruptcy last?

If you meet all of your bankruptcy obligations, you are likely to be discharged 12 months after you were first declared bankrupt.  You may still be required to make monthly payments for up to three years. Whether or not you’ll have to pay anything will depend on your individual situation.

But if your Trustee thinks you have acted irresponsibly with your finances during this period or not co-operated, your discharge may be delayed.

What debts are excluded from bankruptcy?

Bankruptcy is only for unsecured debts – that means no mortgages or car finance loans. But there are some other loans you can’t include in bankruptcy.

These include:

  • fraudulent benefit and tax credit overpayments,
  • child maintenance arrears,
  • court fines,
  • student loans, personal injury claims made against you, and
  • any debts you took out fraudulently.

What happens to my creditors during bankruptcy?

When you go bankrupt, the Official Receiver will tell your creditors about this. This means they won’t be able to directly pursue you to repay those debts. Instead, they will deal with the Official Receiver initially. And after this, they’ll deal with your Trustee.

Your creditors will have to provide details of the debts you owe. This is so they can make a claim. And after your bankruptcy, your debts in the bankruptcy will be written off.

Even though you won’t technically owe anything towards these debts anymore, you still might have to pay something to your creditors. If you can afford to pay after your essential bills and other expenses, you might have an Income Payment Agreement (IPA) or Income Payments Order (IPO) for up to three years.

Getting free impartial advice

The Money Advice Service is an impartial service set up by the Government.
They provide free debt counselling, debt adjustment and credit information services. Visit Money Advice Service

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Looking for friendly help and advice?

Check out our easy-to-read articles and helpful guides if you have any questions about managing your money or if there’s something you just don’t understand about your debts.

If you’d prefer to talk to someone about your debt worries, you can give a member of our team a call on 0161 413 9530 for some impartial advice.

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If you're struggling with debt, you might also benefit from access to additional support services. Our signposting to services page provides details of relevant charities and other organisations that could help you.

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HB Financial Solutions Ltd, trading as Harrington Brooks is now Gregory Pennington Limited.

Your payments into a Debt Management Plan are protected and compensation could be available from the FSCS if there are any shortfalls in funds held on a customer’s behalf.

Gregory Pennington Limited (c) 2018. Registered office: Think Park, Mosley Road, Trafford Park, Manchester M17 1FQ. Registered in England and Wales. Co Reg No. 2855061 Authorised and regulated by the Financial Conduct Authority for its consumer credit and insurance and mortgage mediation activities. Regulated by the Claims Management Regulator in respect of regulated claims management activities.

One Advice Ltd, trading as Harrington Brooks IVA is now Freeman Jones Ltd, trading as Harrington Brooks.

Freeman Jones Registered office: Think Park, Mosley Road, Trafford Park, Manchester M17 1FQ. Co Reg No 4348410. Registered in England and Wales. Regulated by the Claims Management Regulator in respect of regulated claims management activities. Freeman Jones Limited is an appointed representative of Gregory Pennington Limited for its credit broking and insurance and mortgage mediation activities, which is authorised and regulated by the Financial Conduct Authority.

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