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.
Take the decision to go bankrupt
Bankruptcy may seem obviously right for you, but it’s always worthwhile talking to a good free debt advice agency – this is a very bad decision to get wrong!
So if you haven’t taken debt advice so far, I suggest you phone National Debtline on 0808 808 4000. They also have a very good webchat facility, staffed by proper debt advisers.
Your debt adviser will be able to answer many of the questions you have about the process of bankruptcy – for example, should you open a new bank account before or after you go bankrupt?
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.
Complete the 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 – you can save what you have done so far and then come back and add details such as an address for a creditor or a pension manager, or review your Income & Expense amounts.
All your debts will be included in your bankruptcy even if you miss one off your application – except for a few like student loans and Social Fund loans. A debt adviser can tell you if any of your debts can’t be included.
Adjudicator approves application
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, you can have confidence that it will be approved – it is VERY rare for an application to be rejected.
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.
After Covid-19 some people have reported waiting longer for this first interview – this isn’t something to worry about, it doesn’t mean your case looks “difficult”.
If you are nervous about the interview, 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). An IPA cannot be set up after you are discharged.
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 lasts for three years from the date it starts, usually a few months after your bankruptcy date.
You should report significant changes in your income or expenses to the OR. During the three years, the monthly amounts can go up or down or be paused so you pay nothing.
Read Should I get a new job? Work overtime? which looks at the problem of working more if much of the money will be taken by your IPA.
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. If your IPA payments were reduced or halted for a while, this does not extend the three-year IP for longer.
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.