{"id":26503,"date":"2022-04-04T02:40:07","date_gmt":"2022-04-04T01:40:07","guid":{"rendered":"https:\/\/www.lendingstream.co.uk\/blog\/?p=26503"},"modified":"2022-12-20T11:51:53","modified_gmt":"2022-12-20T10:51:53","slug":"what-happens-when-you-declare-bankruptcy","status":"publish","type":"post","link":"https:\/\/www.lendingstream.co.uk\/blog\/what-happens-when-you-declare-bankruptcy\/","title":{"rendered":"What Happens When You Declare Bankruptcy in the UK?"},"content":{"rendered":"\n<p>For most people, declaring yourself bankrupt is the last resort. If you\u2019ve taken out<strong>&nbsp;<\/strong><a href=\"https:\/\/www.lendingstream.co.uk\/loans\/short-term-loans\/\" target=\"_blank\" rel=\"noopener\"><strong>short term loans<\/strong><\/a>, <a href=\"https:\/\/www.lendingstream.co.uk\/loans\/payday-loans\/\" target=\"_blank\" rel=\"noopener\"><strong>payday loans<\/strong><\/a> and other debts that you can\u2019t pay back, you might have no other choice.<\/p>\n\n\n\n<p>You could also be declared bankrupt involuntary. If you owe more than \u00a35,000 to a creditor, they could ask a court to make a bankruptcy order.<\/p>\n\n\n\n<p>If you are going to declare bankruptcy, make sure you know the facts. Get help and advice before going ahead. To get you started, we\u2019ll tell you a bit about what happens when you\u2019re declared bankrupt in the UK.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69f2838d27291\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69f2838d27291\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-happens-when-you-declare-bankruptcy\/#what_happens_after_you_declare_bankruptcy\" >What Happens After You Declare Bankruptcy?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-happens-when-you-declare-bankruptcy\/#effects_of_declaring_bankruptcy\" >Effects of Declaring Bankruptcy<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-happens-when-you-declare-bankruptcy\/#to_begin_with_lets_look_at_the_upsides_of_bankruptcy\" >To begin with, let\u2019s look at the upsides of bankruptcy.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-happens-when-you-declare-bankruptcy\/#now_well_look_at_the_downsides_of_being_bankrupt\" >Now we\u2019ll look at the downsides of being bankrupt.<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"what-happens-after-you-declare-bankruptcy\"><span class=\"ez-toc-section\" id=\"what_happens_after_you_declare_bankruptcy\"><\/span><strong>What Happens After You Declare Bankruptcy?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Once you\u2019ve been declared bankrupt, you\u2019ll be appointed with an official receiver. They\u2019ll get in touch with you to obtain details about all your finances. They\u2019ll also check through all the assets you own. This is because any assets you have can be sold to pay off your debts. Any excess income you have can be taken too.<\/p>\n\n\n\n<p>The official receiver will then take control of all your assets, unless an insolvency practitioner is appointed. Whoever takes over your assets will become the trustee. And by law, you must cooperate with the trustee. They\u2019ll be in charge of selling your assets and collecting money. The trustee will then talk to your creditors about how the money will be shared out between them. If there\u2019s any money left over, you\u2019ll get it back.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"effects-of-declaring-bankruptcy\"><span class=\"ez-toc-section\" id=\"effects_of_declaring_bankruptcy\"><\/span><strong>Effects of Declaring Bankruptcy<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Being bankrupt can affect your life in different ways, both good and bad.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"to-begin-with-let-s-look-at-the-upsides-of-bankruptcy\"><span class=\"ez-toc-section\" id=\"to_begin_with_lets_look_at_the_upsides_of_bankruptcy\"><\/span><strong>To begin with, let\u2019s look at the upsides of bankruptcy.<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>You\u2019ll no longer have the worry and stress of having debts you can\u2019t pay back. Your trustee will take care of everything, and you\u2019ll no longer have creditors chasing you for debt repayments.<\/li><li>You may not lose everything straight away. If you own your home and have a partner or child living with you, it could help. In these cases, the trustee may not sell your home for one year after the date of your bankruptcy. Also, you can keep essential items like clothes, furniture and bedding, or tools that you need for work.<\/li><li>You\u2019ll be able to keep some of your income. The trustee will only take the excess income that you don\u2019t need to live on. If you\u2019re on benefits though, none of it will be taken.<\/li><li>After you\u2019ve been declared bankrupt, your creditors cannot take you to court to get back what you owe them. That\u2019s so long as they\u2019re included in your bankruptcy.<\/li><li>Once your bankruptcy has ended, you\u2019ll be free of all debts that were included in it. This is known as being discharged. It usually happens 12 months after your date of bankruptcy.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"now-we-ll-look-at-the-downsides-of-being-bankrupt\"><span class=\"ez-toc-section\" id=\"now_well_look_at_the_downsides_of_being_bankrupt\"><\/span><strong>Now we\u2019ll look at the downsides of being bankrupt.<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>You could lose a lot of what you own, including your home. Even if your bankruptcy is discharged after 12 months, your excess income could be taken for up to three years.<\/li><li>Your bank account would be frozen. The trustee will only release what you need to live on.<\/li><li>Your bankruptcy could stay on your credit file for up to 6 years. This could make it more difficult for you to borrow money.<\/li><li>If you\u2019re self-employed, your business will be closed. Any assets it has could be taken by the trustee.<\/li><li>Not all debts are covered by your bankruptcy. For example, student loans, court fines, and any <strong><a href=\"https:\/\/www.lendingstream.co.uk\/loans\/\" target=\"_blank\" rel=\"noopener\">loans<\/a><\/strong> you take out after the bankruptcy would be excluded. You\u2019d still have to pay these.<\/li><li>Your bankruptcy would be published for the public to see.<\/li><li>Some businesses don\u2019t let people carry on working for them if they\u2019ve been made bankrupt.<\/li><li>If you want to borrow more than \u00a3500 after being made bankrupt, you must tell the lender about your bankruptcy. If you don\u2019t tell them you\u2019d be breaking the law.<\/li><\/ul>\n\n\n\n<p>These points don\u2019t cover everything, but they give you an idea of the type of things you can expect. Unless you\u2019ve already been declared bankrupt, you should think carefully if it\u2019s the right thing for you to do. Make sure you find out what your options are when you\u2019re struggling to pay back your debts.<\/p>\n\n\n\n<p>There are plenty of sources you can go to for free help and advice. The <a href=\"https:\/\/www.citizensadvice.org.uk\/\" rel=\"nofollow noopener\" target=\"_blank\">Citizens Advice Bureau<\/a> and the <a href=\"https:\/\/www.moneyhelper.org.uk\/en\" rel=\"nofollow noopener\" target=\"_blank\">MoneyHelper service<\/a> are both good places to start.<\/p>\n\n\n\n<p>Remember, if you are declared bankrupt all is not lost, at least it leaves you free to make a fresh start.<\/p>\n\n\n\n<p><strong>Disclaimer:<\/strong> This isn\u2019t professional advice and is for information only. If you are considering Bankruptcy, we recommend you seek personal debt advice. Free debt advice can be found via <a href=\"https:\/\/www.moneyhelper.org.uk\/en\" rel=\"nofollow noopener\" target=\"_blank\">MoneyHelper<\/a>. Also \u2013 any links included above are for reference only and <a href=\"https:\/\/www.lendingstream.co.uk\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Lending Stream<\/strong><\/a> are not recommending any particular partner or provider.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>For most people, declaring yourself bankrupt is the last resort. If you\u2019ve taken out&nbsp;short term loans, payday loans and other debts that you can\u2019t pay back, you might have no other choice. You could also be declared bankrupt involuntary. If you owe more than \u00a35,000 to a creditor, they could ask a court to make [&hellip;]<\/p>\n","protected":false},"author":48,"featured_media":26524,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[267],"tags":[],"class_list":["post-26503","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loans"],"_links":{"self":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts\/26503"}],"collection":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/users\/48"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=26503"}],"version-history":[{"count":3,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts\/26503\/revisions"}],"predecessor-version":[{"id":26584,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts\/26503\/revisions\/26584"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/media\/26524"}],"wp:attachment":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=26503"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=26503"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=26503"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}