This bankruptcy timeline shows WHAT is likely to happen and WHEN if you go bankrupt in England, Wales or Northern Ireland. Some of the times are fixed – the bankruptcy marker is definitely going to drop off your credit file after six years. Others are less definite, but the indications in the timeline here should be right for a large majority of the people who go bankrupt.
UPDATED for the new online bankruptcy application that replaced the old procedure of going to court in April 2016.
There are notes below about each step. These give a brief overview of what some of the stages in bankruptcy mean and have links to more detailed articles.
Take the decision to go bankrupt
Bankruptcy may seem obviously right for you, but it’s worthwhile talking to a good free debt advice agency such as Citizens Advice or National Debtline even if you are sure – this is a very bad decision to get wrong!
Your bankruptcy application will have to be approved by the Insolvency Service’s Adjudicator. If you have taken debt advice and been told that bankruptcy is a good option for you, then you can have confidence that it will be approved.
Get the bankruptcy fees
They can be paid in stages but they have to be paid in full before your bankruptcy application is submitted. See Paying your bankruptcy fees for details. If you don’t think you can afford the fees, read Help With the high Bankruptcy Fees which looks at possible ways to raise the money.
Online bankruptcy application
It’s not complicated but it is very long. If you are very well organised or your affairs are very simple, you may be able to complete this in an evening, but most people will need several sessions, coming back to add details such as an address for a creditor or a pension manager, or to review the Income & Expense details.
Adjudicator checks application and makes Bankruptcy order
When you have submitted your online bankruptcy application, it goes to the Adjudicator’s office to be checked. The Adjudicator’s target is to approve 95% of applications within two working days. When your application is approved your Bankruptcy Order is made – this is the start date for you bankruptcy, not the date you submitted your application.
Immediately you are bankrupt, some restrictions apply which are explained here. If you are unsure about these, ask the Official Receiver’s office. In fact if you are unsure about anything at all, ask the OR’s office!
Interview with Official Receiver’s office
This will normally be in the first week or two after bankruptcy. It usually happens by phone, unless your affairs are complicated.
If you are nervous about this, read “Why I went bankrupt and how it went” which has some details about a reader’s OR interview.
The best advice is to be completely truthful and say if you don’t remember something. The OR is not looking to catch people out, but to find out what happened.
Make NT tax payments (if any)
If you pay income tax through PAYE, your tax code will be changed to NT and you will have to make the tax payments to the OR instead until the end of the tax year in April. You will not be worse off because of this, you will be paying the same amount of tax to someone different. If you go bankrupt towards the end of the tax year, this arrangement may never be set up. If you are unsure what you need to do, ask the OR’s office.
Start IPA monthly payments (if any)
If you have sufficient surplus income, you will be asked to agree to an Income Payments Agreement (IPA). Most people don’t – only about 1 in 6 people who went bankrupt in 2017 had to pay an IPA.
If an IPA is agreed, it will last for three years from the date it starts, usually a few months after your bankruptcy date. An IPA cannot be set up after you are discharged.
During the three year IPA, the monthly amounts can be changed, up or down. You should report significant changes in your income or expenses to the OR.
Discharge from bankruptcy
Almost everyone is automatically discharged after one year. The very rare exception is if the Official Receiver goes to court to suspend the automatic discharge because a bankrupt is not co-operating. See What happens when you are discharged? for more details about how you know if you have been discharged, and what changes.
Discharge also ends the bankruptcy restrictions except for the few people who have a Bankruptcy Restriction Undertaking (BRO/BRU), in which case the restriction on getting credit, becoming a director etc will continue to apply until the end of the BRO/BRU.
Start credit file clean-up
Many people swear they will never again borrow any money after going bankrupt! But if you want a good credit rating in future, going through the Repair Your Credit After Bankruptcy process will speed things up. It may take your creditors a while to update your records, so wait two or three months after your discharge before starting this clean-up process. Your credit rating is never going be good though until bankruptcy disappears six years after the date your application was approved.
Trustee decision about your house
If you have a house with any equity a trustee is likely to be appointed to manage this asset. The trustee has up to three years from bankruptcy date to deal with this property, see this summary of the trustee’s options.
Monthly IPA payments end
This will be three years after your IPA started. From this point on your bankruptcy is effectively finished. It will be another couple of years before the bankruptcy timeline ends when the bankruptcy marker on your credit record is deleted.
Bankruptcy removed from credit records
This will happen automatically six years after your bankruptcy date. Check your credit records a month or so later to make sure everything looks correct! This is the end of the bankruptcy timeline, you have your clean start and now have a clean credit file.