Most people find going bankrupt is stressful. Although afterwards it is usually much easier than you have expected, at the time there seems to be so much to get right.
Here is a checklist, covering everything you need to do before submit your bankruptcy application.
The good news is that this is now all much simpler than it used to be. A few years ago you had to go to court with three copies of very long paper forms and “petition” to have your bankruptcy accepted. Now it’s all online and the whole process feels more friendly and under your control.
Contents
Early stage planning
1. Get some debt advice!
Even if you are sure bankruptcy is your best or your only option, do talk this through with a debt advisor.
This is a bad decision to get wrong. However simple you think your case is, it is worth 30 minutes of your time to check with an expert such as National Debtline to see if you have any better alternatives.
If you are self-employed or have a small limited company, contact Business Debtline who can talk about how your business may be affected.
2. How to get the money for bankruptcy fees
£680 is often a very large amount for some who is in such financial difficulty that they need to go bankrupt. Read Where to Get Help With Bankruptcy Fees if you don’t have that sort of money in your bank account – that has lots of ideas to help.
Don’t let this put you off if bankruptcy is your best option. Going for an IVA now because it sounds quicker is going to trap you into paying much, much more over a longer period. And with more than 30% of IVAs failing, you may be back looking at bankruptcy again in a couple of years.
If it is going to take many months to get the money together, start now – you can pay by instalments (see below) and get the money back if you decide not to go ahead with the application.
3. Your housing
If you are renting and need to move soon, it may be easier to rent somewhere now, before you go bankrupt.
If you have a mortgage and you know you are going to lose the house in bankruptcy (this doesn’t always happen! Talk to a debt adviser about whether it’s going to be possible to keep the house!) when you move is a question of convenience:
- you may want to stay in your house and move after you go bankrupt – any mortgage arrears will still be wiped out by your bankruptcy;
- or you may prefer to stop paying the mortgage now, to let you save up a deposit to rent someone, then move out, hand back the keys and then go bankrupt.
4. What bank account will you use?
You don’t need to worry that you won’t be allowed to have a bank account after you go bankrupt.
All the major banks have Basic Bank Accounts, and you can’t be refused one of these because you are bankrupt. So do your research now to decide which account you will apply for, see Bankruptcy: Your Account Options for more details.
It is usually easier to wait until after your bankruptcy order is made and then open the new account because if you open one now it could be frozen when you go bankrupt – which spoils the point!
5. Getting through to the point when you can apply
If it’s going to take some time before you can go bankrupt – perhaps you want to wait for a divorce settlement, or you need to move first, or you have to save up the fees – then here are some tips to help you get through this period:
- try not to use any more credit. Using your credit card to put some petrol in your car isn’t a problem, applying for new credit card isn’t a good idea.
- it’s good to treat all your unsecured creditors the same. It’s fine to keep paying important debts such as tax debts, rent arrears, council tax arrears, car finance and ones where there is a CCJ. But it’s not good to be paying a relative a hundred pounds a month when your creditors are all getting nothing.
- don’t tell your creditors you are going to go bankrupt. They are unlikely to be sympathetic and some may decide this is their last chance to push you to pay them.
- don’t be worried by threats of court or bailiffs. It really doesn’t matter if you get a CCJ when you are going bankrupt in a few months – the CCJ debt will be wiped out. And bailiffs are like vampires, you have to invite them in – so don’t open the door is usually the best advice! It is VERY rare that they can force entry – see Bailiffs – do you have to let them in?
If you are unsure of any of this, talk to a debt adviser such as National Debtline.
If you are worried you might get a Bankruptcy Restriction Order (these are quite rare!) talk to a debt adviser about this too.
The application itself
6. Get info for the application
Read How to apply for bankruptcy online and note what info you don’t have to hand (addresses of creditors, value of your pension, details of your expenses etc) and get these together.
You don’t need to talk to all your creditors before you do this. It’s not essential to have the exact amounts of the debts correct, and it doesn’t matter if a debt has been sold to a different debt collector.
And it’s reassuring that if you forget a debt, it will still be wiped out by bankruptcy. But it’s good to get a complete list if possible as when you have gone bankrupt the insolvency service will tell the creditors you have listed on your bankruptcy application so you won’t have to tell them yourself.
7. Create an application with the Insolvency Service
This is easy to do by entering your email address and 3 security questions here. You will then be emailed your application number so you can start the application.
8. Complete the application
This doesn’t all have to be done all at one sitting, you can save and return as often as you want.
If you start one early, it’s a good idea to read it all through just before you submit it to check nothing important has changed or got missed.
9. Pay the bankruptcy fees
You can pay online by credit or debit card or in cash at a bank.
You can also pay by instalments, see How to pay your bankruptcy fees for details. You have to have paid the full amount before submitting the application.
10. Pick a date and submit the application
When 8 & 9 are done you can submit the application.
You choose which date to put in your application. Most applications are approved very quickly, so you should assume the actual date of your bankruptcy will normally be 1-3 working days later.
If your rent/mortgage is paid just after your payday, then a few days after that is can be a good time to aim for. This lets you pay your most essential bills and take out some money in cash before you go bankrupt, enough to get you through if your bank account is frozen for a few days. But often there is no very convenient time.
You will be sent an email when the Adjudicator has made a decision, this is usually within 1-2 working days. Then you can then login and see a copy of your bankruptcy order – you are now officially bankrupt!
Missed a debt off your bankruptcy application?
Bankruptcy timeline – what happens when?
Bankruptcy – the big questions
Rob M says
hi i currently have a basic bank account going bancrupt. if i opened a new bank account is this allowed would i not have to surrender this new account also even though no money is actually in there?
Sara (Debt Camel) says
Hi Rob, this a good question, but annoyingly at the moment there is no single answer – it depends on the policy of the bank operating the account it seems. Some banks may let you keep one you had open before bankruptcy but many it seems prefer you to open a new one when you have gone bankrupt – most people choose to do this on the same day as they go bankrupt. The good news is that there is a much bigger range of basic bank accounts for you to choose from – see https://debtcamel.co.uk/bank-accounts-after-bankruptcy/ for details.
Gary says
Hi
Could someone tell me what is taken into consideration about wages etc? I,m wanting to go bankrupt but stay at my girlfriends 3 nights a week as work away from home all week,I do not own or rent a property,so all I pay out monthly is child maintenance ,van insurance,and money towards one of my debts.my mail goes to my sisters house,and I help my girlfriend with bills,would the rest of my wages be swallowed up as disposable income? I have debts of well in excess of £40k and will never afford to pay them off,would it make better financial sense to rent a place or something please help,thanks
Sam says
Bankruptcy is looking like the best option for me. I have currently 16000 of debt 7500 of which is to HMRC for late penalties.
Due to stress if marriage breakdown etc I have not filed a tax return for a while. I am a childminder and after expenses do not usually qualify for tax. Do I need to do my tax returns before applying for bankruptcy.
Am I likely to be prosecuted for not doing them?
Will it affect my bankruptcy?
Sara (Debt Camel) says
Hi Sam, tax debts and penalties can get on top of you and then mount up if you aren’t feeling up to dealing with what may have been a small problem initially. I don’t know whether there is a chance of getting any if the penalties removed, that and getting your current tax affairs in order needs to be your first thought. I suggest you call Tax Aid.
If that doesn’t resolve your problem, talk to Business Debtline https://www.businessdebtline.org/. They help self employed people such as yourself. They can give advice on bankruptcy and also other debt options for you – a Debt Relief Order may be suitable, see https://debtcamel.co.uk/debt-options/dro/.
jim says
hello, great website
ah where do i start?! ok, i ran out of work back in 2011/2012, up until that point i was totally up to date with all bills, loan payments and credit card statements. as soon as the work dried up i went backwards rapidly and ended up with a £16750 credit card debt, a £6k loan debt with my old bank, a £2k overdraft with same bank (halifax) and a couple other smaller debts. i owe approx £26-30k. I’ve ignored it all up until now. i have a CCJ nearly a year old from Lowell debt collectors for just the big credit card debt. I’ve made zero contact and made zero payments. i just focused on getting some more work and money back in my pocket. i live in private rented accommodation (family) i have one current account. i also work cash in hand and don’t declare it. I’ve ignored all this for far too long and its keeping me awake some nights and is a huge burden on my future. I’m thinking maybe bankruptcy is the only option. i have no assets. I’m a single male 34 yrs old and no dependents. any advice would be most welcome
regards
Sara (Debt Camel) says
Not sleeping at night is a sign you need to sort this lot out. Bankruptcy may well be a good option for you – you need to talk to a debt adviser about your situation.
But you need to come clean for your tax situation. Being paid cash in hand means no NI – and that means no pension later in life. Unless you are earning a lot, much of your income may be tax-free anyway… I am assuming you may be classified as self-employed – talk to Business Debtline both about your tax and possible bankruptcy. See https://debtcamel.co.uk/more-information/where-to-get-help/ for contact details.
Jim says
Ok. Thankyou for the advice and the prompt reply
billy says
Good Morning.
Great site. I’m about to apply for personal bankruptcy. I’ve used a mail box account for all my correspondence for over ten years, this includes Bank account, medical data , tax contacts and debt agencies. I do stay with my partner though I am not registered there in any way except I am named on her car insurance.
Will I be penalised if I apply with my Mail box address , or do I need to state my girlfriends address?.
Many Thanks
jim
Sara (Debt Camel) says
Addresses are needed for several things – to establish that England is the right place for you to go bankrupt (won’t be a problem for you but a mail box account doesn’t help with this), to find your credit records to check out your list of debts to decide if you are insolvent (so they will need your mail box address), to see if you have any assets (have you been paying her mortgage for years perhaps?), and to establish what household expenses you are paying.
So you really need to put both addresses on the application. I suggest you put your real address down as your current one and add the mail box address as a previous address. Then when you have your phone interview with someone from the OR’s office, you can explain that you have actually been living at your current address for X years but you have also used the mail box address for correspondence.
Have you taken any debt advice? However obvious it is to you that bankruptcy is your best option, it is still worth 30 minutes of your time to talk this through on the phone with a debt adviser. See https://debtcamel.co.uk/more-information/where-to-get-help/.
Phil says
Hi .
Has anyone made a claim of speedy cash . I sent an email to wagedayadvance and heard nothing yet. I send compliant of on 10 April.
Sara (Debt Camel) says
Speedy Cash is in administration – you need to talk to the administrators about putting in a Claim against SRC. Email customerservice.curo@kpmg.co.uk
Molly Maydom says
Hello
Will the official receiver be interested in my children’s bank accounts and if they are under 16? Are they classed as mine if I opened them?
Kind regards
Molly
Sara (Debt Camel) says
No, they are your children’s. the OR won’t be interested unless you have moved large amounts of money into them!
Spike Douglas says
I may, or may not need to go down this route in the future. However, I have saved up some money (10000) to help my son (who graduates this year) set himself up in a home etc. If I give this to him as planned, would the OR take this into account and demand its return? Is there a time limit?
Sara (Debt Camel) says
You bet the OR would demand the return of that money. You cannot just give away assets and then go bankrupt. You may think of this money as being “for your son” but it is your money.
On the bankruptcy application (https://debtcamel.co.uk/8-sections-bankruptcy-application/) you are asked to lists assets over £500 that you have given away in the last 5 years.
ORs can be reasonable when someone’s circumstances have changed. If your finances 4 years ago had been great, you could clearly afford to give a gift that large and afterwards you carried on with your life for three years, paying all your debts before you became unexpectedly ill and unable to work, then that would be viewed very differently to someone already in a financial mess giving away £10k and then going bankrupt.
Spike Douglas says
Thank you, that’s what I thought. These are historical business debts (15 years ago), incurred on credit cards. My partner was supposed to give me money towards them, but never did. The card companies hiked the interest approx 5% ->34% at which time repayments became impossible. I took advice from CAB. Cashed in pension and paid priority and then as much as a I could to others, after that £1 a month. Other than the odd letter, haven’t heard much. Accountant says let sleeping dogs lie. Other than the above we have no real assets. Next year I become a student again. Would the best idea be (1) Play honest broker and pay in full. (2)Try to negotiate reduced settlement (3) Give smaller amount to son, live on rest. (4) Let sleeping dogs lie? (I’m 64 BTW)
Sara (Debt Camel) says
you said they were business debts – were the cards taken out by the business, or were they just normal credit cards you had which you used for business expenses?
Spike Douglas says
These were personal cards used for business. Cheaper rates at the time.
I was (and still am) technically a sole trader. For the last eight years I’ve worked in Education, and they (the colleges/universities) want to pay me through payroll. (I suspect to avoid VAT). I do very small other bits of freelance work. As I have just two O levels, I need to gain extra qualifications to progress one way or the other.
Nancy says
Good Afternoon
i submitted my application for bankruptcy yesterday and just waiting on a decision, i was paid yesterday and my bills come out from the 1st to the 8th of the month. will all my accounts be frozen and no bills be paid around this time? i am getting really concerned as even though i am in a lot of debt i never fall behind in my rent etc and this is something i really dont want to happen. you go through this whole process and dont get to speak to anyone until the decision has been made and by then it may be too late, i am fed up with all of it and just want a fresh start, but im struggling to stay calm because i cant speak to anyone!
can you come back to me asap?
Thank you
Sara (Debt Camel) says
Normally I would suggest that in this sort of situation it is less stressful to submit your bankruptcy application after the major bills have been paid.
But you have already sent yours. It may be that your account is not frozen for a few days. But if it is, you can just ask your OR to tell the bank they can unfreeze it.
Jason says
Hi I am very likely to be going down the bankruptcy route I have nearly 30k worth of debt and stupidly ive been gambling recently to try and win money to survive will the OR take a dim view of this and also how would I find out my pension pots as I’ve had several jobs over the years with different pension companies. Thanms
Sara (Debt Camel) says
How old are you ?
Jason says
49 yrs old
Sara (Debt Camel) says
In that case it doesn’t matter how much money there is in your pensions. You can’t take the money out and it won’t be affected if you go bankrupt.
Jason says
Ok thankyou will they still need to know who I have pensions with and would I be right in not paying my creditors so I can get the fees together because I want to make sure priority debts are paid
Sara (Debt Camel) says
You do still need to list your pensions, but it’s not going to be a problem if you miss one-off that you haven’t made any contributions to for years. Just tell the OR in the interview that you think you may have missed off some old pensions as you don’t have contact details and you are trying to trace them. You shouldn’t delay going bankrupt to wait until you have all these.
See https://www.moneyadviceservice.org.uk/en/articles/trace-lost-pensions-and-request-pension-forecasts which looks at how to trace pensions. This is a good idea to do even if it wasn’t for your bankruptcy!
Stopping paying any non priority creditors is a good idea so you can save up the fees. You may even decide to stop paying a few priority creditors such as council tax and electric/gas if you will be able to go bankrupt in the next month or two. But don’t miss rent payments! See https://debtcamel.co.uk/help-with-bankruptcy-fees/.
It’s important that you treat all your non priority creditors the same. So don’t just stop paying one or two, stop paying any of them.
re gambling, yes the OR will take a dim view. If gambling has contributed substantially to your bankruptcy you may well get a Bankruptcy Restriction Order, see https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/bankruptcy-2/bankruptcy-restrictions-orders/ for the implications of this… for most people they honestly don’t make any difference to your life. If your problem gambling is recent and you were already in a big mess before, a BRO would be unlikely to be long, but it depends on the details of the case.
Have you taken advice on bankruptcy? It is ALWAYS worth the time to talk through your situation with a debt adviser. If you haven’t, phone National Debtline on 0808 808 4000. They can also talk about which creditors to stop paying to get the fees.
Jason says
The gambling wasnt the cause of the debts its only been recently ive been in debt for years but managed to make the payments I got made redundant end of last year thats when it started my partner has been supporting me but were now splitting up, was on the national debt line website last night thats where I considered the bankruptcy option was considering an iva but they seem more expensive and longer I will speak to an advisor from national debt line at the end of the day im in a rented property with my youngest son and I have to put him first if i try to carry on i know I’ll miss payments and the stress will just build up i have to put him first and admit defeat its not what I want to do as I have pride and hate being in this situation but I have no option and thankyou for the advice its nice being able to talk to someone about it
Sara (Debt Camel) says
it is possible you may not get a BRO.
National Debtline are excellent. IVAs have little to recommend them if you have no assets to protect – they last much longer and many of them fail.
Jason says
What is a bro? I have no assets i have a car on hp but need it for work as work is a 60 mile round trip I have a sofa a TV and a xbox I’m so ashamed tbh 49 yrs old and have nothing and now going bankrult
Sara (Debt Camel) says
Bankruptcy Restriction Order, see link in my previous comment.
Talk to National Debtline about the HP car.
MM says
Hi, Sara, I would like to apply for bankruptcy, debt of 17K, no job ATM, have 2K in accounts, will they allow me to take 2K out before the bank accounts is frozen?
Sara (Debt Camel) says
is there a reason you are looking at bankruptcy not a debt relief order? eg do you expect to get back to a well paid job within a year?
what benefits are you getting?
MM says
I did ask debt adviser, they said debt relief order is not for me, as it is only for those whose health is not great. I am on furloughed and UC, they suggested IVA and bankruptcy, I worried about my saving of only 2000 pounds which is for my next year exam will be taken away.
Sara (Debt Camel) says
do you mind saying who the debt adviser you spoke to worked for? That sounds a VERY odd comment.
what is this exam you will take next year?
what is the chance you will get your job back at the end of furlough? if you do, can you then make reasonable payments to your debts or were you struggling even before lockdown?
MM says
I cannot remember the debt adviser’s name, I had many calls , a couple of them said DRO not for me , and tried to put me into IVA 80 pounds for 6 years, this is what they proposed
I am taking exam for my future work, CFA level 3 next year, I am saving little by little for next year exam and course fees (2k only enough for exam, not course fees) , so worry so much it would be taken away if apply for bankruptcy, some debt advisers helped me calculate the expenditures, and there are no much left every month, however, because of this 2K, I worry about if I take it out and OR will think it’s improper?
Even I get back to work, company offers part time and company asks everyone to take at least one month unpaid leave in winter to save the job , so I don’t think I will get improvement in a very short time, or a year
or you think IVA is better for me comparing with bankruptcy?, I have nothing, no property or car, single, income is only furloughed pay and UC
MM says
Hi, Sara, thanks for your response,
I cannot remember debt adviser’s name, I had many calls, and at least three of them said DRO is not for me, it’s for the people whose situation is worse than me (like in bad health), some of them proposed to me IVA of 80 pounds for 6 years.
I am taking CFA level 3 exams next year, so I saved 2k for my exam fee and course fees, some debt adviser did calculation of expenditure, there won’t be much left from my furloughed pay and UC, so I worried if 2k being taken away , or if I take them out before bank account freezes, will OR think it is improper?
if unfurloughed, company offers part time job and all staffs take unpaid leave at least one month in winter to save jobs, I really don’t think my pay will get improvement shortly, or a year
Sara (Debt Camel) says
I had many calls, and at least three of them said DRO is not for me, it’s for the people whose situation is worse than me (like in bad health), some of them proposed to me IVA of 80 pounds for 6 years.
ok, you have been talking to firms that are “IVA lead generators” – they make their living by telling people to get an IVA. You need to avoid them like the plague.
What has been your job that you are furloughed from? is it related to financial advice/ are you going back to a real job there or is there talk of redundancy?
CFA level three – is that the last exam? if not, how many more are there?
MM says
Thank you Sara,
My current job is not related to Finance, my course is, CFA level three is the final one, but on the conditions that I pass level two this December, if not, next year still level two
I am cabin crew in Aviation , now sure when is back to work, now dealing with covid anxiety, study anxiety, debt anxiety and unemployment anxiety,
Another question is : if I apply for bankruptcy, and then being made redundancy and get redundancy pay like 3K, will it be taken by OR?
Talked to a bankruptcy expect this afternoon, he suggested bankruptcy after calculate my expenditure, but no idea of 2K, he said he never deal with people having 2k in the account applying for bankruptcy
I am so frustrating , After talking to so many people, still haven’t got a better way to sort it out, really appreciate your expert advice
I really want to keep this 2k for my next year exam
Sara (Debt Camel) says
The problem is that you are in such an uncertain situation.
If you get your job back, then you can look at your debt situation then.
If you get redundancy, what sort of job will you look for?
When you don’t know the big things that may happen to you, I am afraid it’s not easy to choose your debt options.
At the moment if you can’t pay your debts, token payments may be your best choice, see https://debtcamel.co.uk/token-payment-debt/.
That is NOT a long run solution, but it puts things on hold so you can see how things will work out in a few months time. That is better than taking the wrong decision.
It is a big mistake to bankruptcy if you don’t need to.
It is a big mistake to go for an IVA where you may not be able to afford the payments – more than a third of IVAs fail, leaving people back with their debts. Or if you will get a well paid job, then an IVA means you can end up paying a lot MORE then your debts as the IVA fees are huge.
Debt advisers see a lot more people with failing IVAs who regret theta choice than they do people who regret going bankrupt… but that isn’t a reason by itself to o[pt for bankruptcy.
You should NEVER trust a debt adviser that says DROs are only for people with health problems, that is simply a LIE.
Next time you want to talk to a debt adviser, try National Debtline on 0808 808 4000. There are some unscrupulous commercial firms that choose names that are similar so you may go for them by mistake, Ring that exact phone number to get the Real Thing.
Michael says
Hi , I have £20,000 left to pay finance on a taxi over the next 3 years. I’m not earning enough to pay for it. I need to pay my landlord as a priority first. Also I won’t be able to pay my tax next year. I’m looking for other driving jobs. Can I default taxi then go bankrupt. Also which way round would I do it. Default first or bankrupt first.
Sara (Debt Camel) says
With car finance for your business tax problems you should talk to Business Debtline as soon as possible about your options and the timing of bankruptcy if that is best for you. I am not saying bankruptcy isn’t right but it’s always worth the time to talk to an expert about this: Business Debtline help the self employed and small limited company owners: https://www.businessdebtline.org/
Shelim says
Hello Sara Can I have some advice please
I am receiving universal credit and I work 20 hours in a restaurant. I live in a private rented flat . I am receiving housing benefit. I have debt of £20,000 which I am not paying anything at the moment. Before I was with step change due to family breakdown divorce I can not afford to pay anything I don’t own any asset. I am worried about this debt it’s causing me a lot of stress. I was considering bankruptcy – would that be the best option – what do I need to do to declare myself as bankrupt ?
Please help
Sara (Debt Camel) says
Can you say how long you had a DMP with StepChange?
Also 20,000 – is it more likely to be more? or less?
Shelim says
Hello my debt is £20,000
I was with step change for 4 years and paid £110 per month. My family broke down and I was made homeless in year 2017. After this I made payment of £6.00 per month for 6 months. From 2019 I have not been paying anything. My divorce cost me a lot in solicitors fees.
Sara (Debt Camel) says
In previous comments you have said you have an IVA and a mortgage. I suggest you talk to StepChange about your full situation.
Shelim says
Hello Sara
I am posting this on behalf of a friend who is very stressed out . I found your information very useful so I suggested putting the details for him to help. My friend has been digniosed with severe depression and is unable to do anything for him self
Thank you
Your help will be very appreciated
Sara (Debt Camel) says
That’s very nice of you but I am afraid your friend does need to talk to a proper debt adviser and go through his situation with them. I suggest National Debtline on 0808 808 4000. You could sit with him while he makes this phone call? After he has started it and explained his health problems he could even pass the phone to you so you could do most of the talking? But I can’t suggest what he should do based on you putting in short comments here.
lisa says
Hi,
My husband ran up a £60k debt with our business partner then ran off with another woman (nice guy!). My (now) ex-husband is first respondent on paperwork where our partner was suing us (we were join partners on the agreement), I am second respondent and the court have found in favour of our business partner (naturally), so this means the money plus fees needs to be paid back to her.
the court awarded this to our business partner in December 2020; in advance he went bankrupt in October 2020, to avoid paying it. I have incurred other debts leaving the marriage, but don’t want to go into bankruptcy if i can help it and if they can still go after him. I have written to our business partners solicitors and told them that if they come after me, I will have no choice but to also go bankrupt (because i don’t have any other choice), but need some advice.
I know he will not have included this debt in his bankruptcy because he wants to hurt me as much as he can – even though he left me (he does not financially support our children either, so im trying to do all this alone in spite of his vile behaviour – i think he’s angry i let her have him).
In any event, can they go after him for this debt since hes’ not included it or will they now skip him and go straight to chase me? If so i will have to go bankrupt and include it within mine.
Weatherman says
Hi Lisa
Nice guy indeed…
If these are debts that the business owed (or you’re not sure), I would contact Business Debtline, as things might work differently: https://www.businessdebtline.org/
If they were personal debts, the following would apply…
Because the issue giving rise to the debt (the events giving rise to the business partner’s claim) occurred before the date of your ex’s bankruptcy, it would be included in the bankruptcy. Bankruptcy covers all debts (with a few exceptions, e.g. court fines or child maintenance) whether or not they were listed on the application. But the bankruptcy applies to the *person*, not the debt – so for a joint debt, the other party can still be chased. Unfortunately in this case that would be you.
If you are thinking of going bankrupt, it’s always worth getting advice first! National Debtline (who also run Business Debtline) are the people to speak to: 0808 808 4000
Claire says
Help. I’ve been advised to go bankrupt by Stepchange, but I have a few questions that are currently making me feel sick and it’s a bank holiday. My son and daughter both have special needs and I oversee their bank accounts so my name is on them. For my son, his moneygoes into my account so that I can manage it for him. Should I change this before I go bankrupt? Will their accounts be frozen too? What will happen to my benefit payments that try and go in while my accounts are frozen? Will Natwest allow me to keep my basic account and should I get all my direct debits benefit payments moved into it? Do I open a new basic account with Nationwide (I think this was your recommended one) before hand. How long will my accounts be frozen for if I’m allowed to keep it? Will the receiver allow me to keep my benefit payments. I’m so stressed.
Sara (Debt Camel) says
– are your son and daughter aged over 18?
– do you have any income apart from benefits?
– can you say how large your total debts are?
Claire says
My total debts are £15, 883. Yes both children are over 18. I have no other income
Sara (Debt Camel) says
Is there a reason StepChange recommended bankruptcy rather than a Debt Relief Order?
With no other income apart from benefits, the official receiver will not expect you to make any monthly payments.
There are various ways you can help adult children manage money, see https://www.scope.org.uk/advice-and-support/managing-money-for-someone-else/. I suggest you talk to StepChange about what you do now and whether this should be changed when/before you go bankrupt. There is a link in that page to a charity called Dosh – if your children have learning disabilities, then they can provide useful information and support.
I don’t know if NatWest will let you keep the basic bank account. I usually suggest someone opens a new account (eg with Nationwide) the day their bankruptcy is approved – it’s simpler than opening it now and not knowing what will happen to it.
Bank accounts are rarely frozen for more than a fwew days unless there is a lot of money in them. StepChange can talk you through thee practicalities.
Claire says
Hi Sarah, thank you for your quick reply. I thought I had already left a disjointed response but I cannot find it. Yes, both of the children are over 18. My eldest is 22 but he has autism, learning difficulties and mental health difficulties and at the moment his income is being absorbed into the household because I’m in so much debt. My daughter is more capable. My debts total 15,883 but I cannot do an IVA/DMP as my financial circumstances are due to change next year when my daughter hits 20. I just need all this dealing with for my own mental health( I suffer with chronic depression).