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How bankruptcy affects me

How long will bankruptcy affect me?

You are restricted by the terms of your bankruptcy for at least 12 months. Depending on your circumstances, you may continue to make bankruptcy payments, have limited borrowing options, or be affected by your bankruptcy in other ways for a number of years after it has ended.

After bankruptcy, lots of different processes begin. Not all of these will affect everyone who goes bankrupt, and it’s impossible to say in advance how long some of them will last. Before going ahead with bankruptcy, it’s important to get free and impartial debt advice.

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How long does bankruptcy last?

You are subject to the terms of your bankruptcy for a minimum of 12 months. After this time, you’re usually ‘discharged,’ which means the conditions no longer apply.

You are subject to the terms of your bankruptcy for a minimum of 12 months. After this time, you’re usually ‘discharged,’ which means the conditions no longer apply. Your discharge can be suspended if you break any of the terms set by the official receiver, or don’t cooperate with them.

Find out how you’re affected after your bankruptcy has ended over time:

How long does bankruptcy stay on your credit record?

Bankruptcy is recorded on your credit file for at least six years from the date your bankruptcy started. Find out more about bankruptcy and credit files.

How long does it take to go bankrupt?

If you can gather all the details needed by the official receiver and have the money available to pay your fees, going bankrupt can be a relatively quick process.

You apply online and an adjudicator accesses your application. Read our guide about how to go bankrupt for more information.

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Here’s what you can expect after bankruptcy.

12 months after bankruptcy

At this point, you’re discharged from your bankruptcy. Most of your debts are formally written off at this time, although you’ll still have to pay some, including student loans, criminal fines and fraudulent debts.

Some other restrictions end at this point. For example you can be a company director again, or you can borrow more than £500 without having to tell the lender about your bankruptcy. If you don’t cooperate with the official receiver, for example if you don’t give them information they need, a court can order your discharge to be delayed until you cooperate.

15 months after bankruptcy

This is when the details of your bankruptcy are normally removed from the public Individual Insolvency Register. However if the official receiver found you acted dishonestly or irresponsibly they may apply bankruptcy restriction undertakings (BRU) which will mean your bankruptcy stays on the public register for longer.

Two years and three months after bankruptcy

Your official receiver or trustee has two years and three months from the date your bankruptcy application was approved to decide what to do with any equity in your home.

Depending on how much equity you have, they might sell the property, apply a charging order so they can get the equity back if you sell or remortgage in the future, or they may give you the equity back if it’s only a small amount. They then have another nine months to take the action they’ve agreed.

Three years after bankruptcy

The deadline for your official receiver or trustee to finish dealing with any equity in your home is three years from the date your bankruptcy application was approved.

But if you didn’t declare your property to the official receiver at the start, this three year period runs from the date they found out about your property, not the date of your bankruptcy.

Three to four years after bankruptcy

If the official receiver found you had money left over each month after you paid your essential living costs, they may have set an income payment arrangement (IPA). This will order you to make payments for a three-year period which will start sometime in the first 12 months before you’re discharged.

If you had an IPA set, the last payment will be somewhere between three and four years after your bankruptcy, although you can still be chased for any missed IPA payments after this.

Six years after bankruptcy

Details of your bankruptcy will be removed from your credit file which is used to calculate your credit score. All your creditors should have updated your credit file to list the debts which will be defaulting on or before the date of your bankruptcy. This means all the debts you had before your bankruptcy should now have disappeared from your credit file too.

It’s a good idea to check your records with all three credit reference agencies to make sure this has happened. For most people, getting credit again will become much easier from this point.

If the official receiver applied a bankruptcy restriction undertaking (BRU) or order (BRO) for more than six years, because you acted dishonestly, your bankruptcy will still appear on your credit file until this ends.

Sixteen years after your bankruptcy

If the official receiver found you had done something seriously dishonest, they may have imposed a bankruptcy restriction undertaking (BRU) or order (BRO) for up to 15 years. This could start any time before you were discharged, so the end could be up to 16 years from the date of your bankruptcy.

This type of action is rare, and would only normally happen with high-value fraud or other criminal activity.

Indefinitely

Details of your bankruptcy were recorded in The Gazette at the start. They stay in The Gazette records forever and can be searched by looking through back editions, or by searching online. If you live in Northern Ireland, bankruptcy listings are also published in the Belfast Telegraph every Friday.

Don’t worry though – it’s very unlikely anyone will find details of your bankruptcy this way by accident and lenders don’t use this information when they’re credit-checking you.

Get free bankruptcy advice

If you’re considering bankruptcy, use our online debt advice tool which will provide you with the best solution to your debt problem, available 24 hours a day.