The 8 sections of the bankruptcy application

If you are thinking of going bankrupt, this page looks in detail at the eight sections of the online bankruptcy application in England and Wales that was introduced in April 2016.

You may have come here from How to complete the online bankruptcy application.   That article is a more general look at the application process – including how you start a bankruptcy application, why this information is required and what to do if you don’t have all the details.

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1) Personal Details section

You are asked for:

• your gender, National Insurance number, marital status, any other names you have been known by in the last 5 years;
• your mobile number and another telephone number (these are optional);
• your current address, when you moved there, whether you own it, rent with a tenancy agreement, rent with no tenancy agreement or “other”;
• who lives with you – their names, relationship to you (partner/spouse, child, other), their age bracket and whether they are financially dependent on you;
• any previous addresses for the last three years;
• any dependents that don’t live with you.

It is possible to go bankrupt if you are homeless:

• if you have a correspondence address, put that in and under “Do you own the property?” select “other” and say “correspondence address”
• if you don’t have an address you can use for correspondence enter “‘no fixed abode’ into the ‘First line’ field and ‘x’ into all the other address lines. Make sure you are providing a valid email address and a contact telephone number as a back-up to the email address.

2) Employment section

You are asked if you:

• have you been a director of a limited company in the last 12 months?
  • if yes, the name, address and company registration number. Also whether the company is subject to insolvency proceedings and whether your directorship is still active;
• have you been self-employed in the last 3 years?
  • if yes. its trading name, if it has debts under a different name, type of business, when it started and stopped trading and address. Also its VAT number, your income tax reference number, where you keep your business records, a list of your employees, any former employees that say you owe them money and details of your accounts;
• have you been a partner in a non-limited business in the last 3 years?
  • if yes, similar details to self employment with the addition of details of your business partners (name, address);
• have you been employed by someone in the last 12 months?
  • if yes, employer’s name and address, start and end dates.

If you are concerned about any of the company / self-employment / partnership questions, a good place to get advice is Business Debtline.

3) Bank accounts and savings

You are asked for details about all the bank and savings accounts you have had in the last 2 years. This includes all of your personal accounts and savings in the UK and abroad as well as any joint or business accounts. Also include any accounts which have been closed or which currently have a zero balance. NS&I accounts don’t go here, they are listed in Assets below.

The details include sort code, bank name and address, account number, current balance and when you opened the account.

At the end you are asked which is your “main” account: “If your bankruptcy application is successful, we will ask the provider of your main bank account to keep the account open.”  In practice you can’t rely on the bank agreeing – check out Bankruptcy – your bank account options for details of accounts you can operate whilst you are bankrupt.

4) Assets

You are asked:

• Do you own or have a financial interest in any properties? You can have a beneficial interest even if you don’t legally own a property, for example, if you have contributed towards buying or improving the property (mortgage payments, initial deposit, extensions, etc)
  • you are asked for the property address, type (detached etc), number of bedrooms, who lives there, how much it is worth;
  • if you own it jointly, who else owns it and how the beneficial interest is split between you (the applications defaults to equal shares but you can change these percentages).
  • details of any mortgages, secured loans and charges.
  • if you are unsure about beneficial interest in a property you don’t own, or the split in one that you own jointly or if someone else has a beneficial interest in a property solely in your name, you should take debt advice about this.
• Have you owned or regularly used any vehicles in the last 12 months?
  • you are asked for make, value, where it is kept and the details of any finance on the car. Finance here is secured finance such as HP or leasing, usually arranged by the dealer, or logbook loans – it doesn’t mean a loan you took from your bank that you uses to buy a car.
• Do you have any pension, endowment or life insurance policies?
  • you also need to include pensions that are already being paid.
  • you are asked for the value of the pension. This is a hard question to answer if you have a defined benefit pension which is related to your salary: there may be something on a recent statement from your pension provider but the good news is that it doesn’t really matter as it is irrelevant to the Adjudicator or the Official Receiver’s actions.
• Other items you own:
  • your bank account balances will already show up from when you listed your accounts
  • cash outside of your bank accounts – the OR is interested in significant amounts of case, not the money you have in your purse for this week’s shopping.
  • Items or possessions – list things worth more than £500 each. This is the current value you could sell the item for, so the secondhand amount, not what something originally cost. As the application says “It’s very unlikely that items you need for your daily life (eg washing machine, sofa, refrigerator) will be sold.” Only list your possessions, not your partner’s or children’s things.

• • Compensations or legal claims – the long list of possible claims includes personal injury, employment tribunals and PPI mis-selling. If you go bankrupt it is likely that any money from these will be paid to the Official Receiver. If you have claims that may be large, consider delaying bankruptcy until it is clearer how much you will get – it’s important that you take debt advice about this before submitting your application.
  • Interests in wills or trusts. You are asked to list any trusts you are a beneficiary of and anything that has been left to you in a deceased individual’s will that you haven’t yet received. As with legal claims, if you go bankrupt inheritances will be paid to the official receiver so take debt advice if you are in this situation.
  • Stocks, shares and investments. This includes share options, any investment schemes you’re a member of and National Savings and Investments products eg Premium Bonds. You should expect to lose all these assets.
  • Self-employed business assets. This is a long list – ask Business Debtline for advice if you are unsure about this section.
  • Money you’re owed. This isn’t just loans to friends so check the list given as it includes things like outstanding invoices, expenses claims and deposits you have paid.

As a general rule, if you think that you have found a clever wheeze to conceal some assets from the OR, then think again…. concealing assets is a criminal offense.

After listing your current assets, you are also asked about assets you no longer have:

• In the last 5 years, have you sold, transferred or given away any properties?
• In the last 5 years, have you cashed in, sold, transferred, or given away any pension, endowment or life insurance policies?
• In the last 5 years, have you sold, transferred or given away any assets worth more than £500 each for less than they’re worth?

5) Money you owe

You are asked about your debts: the name and address of your creditor, balance owed, the debt type, roughly how long ago the debt started and the reason for the debt.

Debts include things like utility bills you haven’t paid, benefits overpayments, rent arrears. List all your debts, even if you know the debt won’t be wiped out by bankruptcy eg student loans.

If you are in dispute about whether you owe a debt, or you think the debt may be statute barred or unenforceable for some reason, still list it and explain the details to the Official Receiver at your interview.

The “reason for the debt” may worry you. If it’s a loan, you may have taken it out for a specific purpose – to buy a car or redo the kitchen say. But a credit card you have had for a while may have been used for many things, then “Household bills/living expenses” would be the usual box to tick, unless some of the others seem especially relevant.

If your debt has been sold to a debt collector this is the creditor, not the original lender.

Your credit record is a good source of information about your debts. It’s worth getting a copy of your credit records which should help, especially if some of your debts have been sold to debt collectors but you have been ignoring them and not keeping any letters. You could also use the balances showing on your credit reports – you don’t have to phone around and get exact balances the day before you submit your application.

It’s not clear if you have to list overdrafts, mortgages, secured loans, or car finance here, as you will already have put them in. I would include them to be on the safe side!

If you forget to put a debt on this form it will still be included in your bankruptcy, so there is no need to panic if you think you can’t remember some very old debts. But it’s a good idea to try to list everything here – not only will it help to prove to the Adjudicator that you are insolvent, but the Official Receiver will inform all the creditors listed so you won’t then be hassled by the creditors.

6) Income & Expenses

You are asked for a lot of details about your income and expenditure:

This is the starting point the Official Receiver uses to assess if you should have to make monthly payments, called an IPA, for three years. The large majority of people who go bankrupt do NOT have to make IPA payments.

If your only income is benefits, including disability benefits, then you will never be asked to pay an IPA.

If you live on your own and have a job with a regular income, this is usually fairly simple to complete.

If your income is variable, you should give the average amounts over a sensible period of time; this would normally be a year, but if you have had a pay rise or large drop in hours recently, then just use the more recent figures. If your income is extremely erratic, you use the average amounts but make a note of the minimums and maximums and talk to the Official Receiver about these in your interview.

The application says it needs information about your partner’s income “to understand how your household splits its expenses, but no one else’s income will be affected by your bankruptcy. We also won’t share their information with anyone outside the Insolvency Service.” The simple way to split the bills is for you divide the household bills roughly be how much you earn, each paying half if you earn about the same, if your partner earns twice as much as you, they should pay 2/3 of the common bills such as rent, council tax, utilities etc.

You may also be unsure how much you can put down for certain expenses. “What you spend” is a simple answer. But you may not have spent anything on clothes for the last two years as you have been struggling with debt –  the Official Receiver will still allow a sensible amount for clothes going forward.

Things people often get wrong include putting an annual or quarterly bill down as monthly, or putting your weekly supermarket shop in as your monthly expenditure. Try to think about everything you buy in a year, even if you don’t buy it every month: light bulbs, printer ink, Christmas presents etc.

If you talk to a debt adviser they will be able to help you draw up an income and expenditure sheet you can use to complete this section. This is especially important if you have disability benefits and other income as well.

If you later realise you missed some things off or the amounts were wrong, just tell the Official Receiver during your interview.

7) Legal proceedings

You are asked if you have legally separated, divorced or dissolved a civil partnership in the last 5 years, including any ongoing divorces etc. Also if you are involved in any ongoing legal claims.

8) Debt history

You are asked:

• how and when your debts started?
  • you are asked the date you first realised you couldn’t repay your debts. This is the date your realised you would have to go bankrupt. (You may have had an arrangement to pay less to a creditor for ages, or a debt management plan, but here you were still planning to repay your debts, just more slowly, so this doesn’t count.)
  • there is a list of possible reasons for your debt problems – tick all that you think are significant.
• have you used any debt relief options (bankruptcy, DRO, IVA, DMPs) in the last 2 years?
• have you made any extra payments to some creditors but not others in the last 2 years?

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