Bankruptcy lawyers and trustees

Bankruptcy in England, Wales and Northern Ireland all works the same way.

• The Insolvency Act 1986 covers bankruptcy in England and Wales
• The Insolvency (Northern Ireland) Order 1989 covers Northern Ireland

Bankruptcy in Scotland is called sequestration. It works differently.

Important things to know about bankruptcy

It is a form of insolvency.

• It is often for people who cannot pay debts in a good amount of time
• Assets like a house or car can be sold to pay off debts

It is probably not a good option for you if:

• Your assets are worth more than your debts
• All your regular payments are up to date
• You can afford to keep making your regular payments

Need bankruptcy advice?

What is UK bankruptcy law?

The people you owe must write off your unsecured debts under UK bankruptcy law.

You are subject to restrictions during the 12 month term of the bankruptcy.

The people you owe are legally bound to stop charging interest during your bankruptcy.

In most cases they cannot contact you or take legal action to collect the debt.

An official receiver (OR) looks at your finances and debt payments over the past few years.

In Scotland, this is done by the Accountant in Bankruptcy (AiB).

What is a bankruptcy offence?

There are things you legally can and cannot do if you go bankrupt.

You must give the OR details of:

• All your debts
• Your assets
• Your income

It is a criminal offence to hide any assets or deliberately give an OR or AiB false information.

Other bankruptcy offences include:

• Changing the name of your business to try and hide your bankruptcy
• Borrowing more than £500 from a creditor without telling them you are bankrupt
• Refusing to hand over documents the OR asks for

Be open and honest with the OR looking after your bankruptcy.

Use our free online debt advice tool to find the best solution for you.

What are the bankruptcy terms and restrictions?

Bankruptcy normally lasts 12 months. But it can be longer.

There are financial restrictions throughout this time.

For example:

• You cannot borrow more than £500 without telling the lender that you are bankrupt
• Self-employed people cannot trade in a name other than the one in which the bankruptcy order was
• You cannot act as a director of a company
• In Northern Ireland, you cannot leave the country without permission

Bankruptcy is also meant to help the people you owe money to.

You may have an income payment agreement. This is when:

• You make monthly payments to the people you owe
• The amount is taken from any money left over after essential household spending
• It could last up to three years

Your assets could also be sold to pay creditors. But you can keep anything "essential" for day-to-day living.

What is a bankruptcy trustee?

A bankruptcy trustee looks after your bankruptcy.

• They take control of the bankrupt person's assets
• They oversee the assets' sale

The trustee is usually the OR or AiB for your bankruptcy.

But they may appoint an insolvency practitioner as trustee instead.

Bankruptcy trustee powers

A bankruptcy trustee has powers to:

• Look at the finances of a bankrupt person
• Collect payments from them
• Pay the people they owe
• Sell their assets

The trustee can also apply to the court for powers like:

• Redirecting mail or
• Summoning anyone they think has the bankrupt person's property

Do I need a lawyer to go bankrupt?

You should not need a lawyer if bankruptcy is right for you.

But make sure you get professional advice first.

Bankruptcy can seriously impact your life.

• You could lose your property
• Your credit rating as affected
• It can impact your work or business

Use our online debt advice tool to find out if bankruptcy is right for you.