A reader asked:
I went bankrupt in 2021 and was discharged a year later. I am not paying an IPA. My question is about savings. Can I save now without any risk of my savings being taken from me?
Also my grandmother wants to give me a large sum of money but I’m not sure if it would be safe so the last thing I want is for her to lose money, so I’ve been reluctant to do it.
This article looks in detail at what happens when you are discharged from bankruptcy: the practicalities, the implications for savings and gifts and the restrictions that end after discharge.
Contents
Discharge is almost always after 12 months
Almost everyone is discharged from bankruptcy automatically 12 months after the date they went bankrupt.
During these 12 months when you are bankrupt, you have to co-operate with the Official Receiver (OR) and give information when asked to do so.
If you don’t co-operate, the OR may ask the court to suspend your discharge – so you won’t be discharged at the end of the 12 months.
This is very rare and you will know if this happens.It isn’t done in secret.
Don’t worry about the remote possibility that you won’t be discharged The OR doesn’t expect you to have a perfect memory or receipts for everything bought over the last five years. “Not co-operating” means refusing to answer questions or not telling the OR the truth.
In the unusual case where your discharge from bankruptcy is suspended, you will be told by the court whether you have to do anything in order to get your discharge. If you don’t understand what is happening or you can’t do what you have been asked, talk to your local Citizens Advice about what your options are. Do not ignore this problem as it won’t go away.
Discharge day – nothing happens!
You may have had the day ringed in your diary for months, but nothing visibly happens when you are discharged!
You don’t get a certificate or even an email from the OR.
If you haven’t heard anything from the OR about your discharge being suspended you can safely assume that you have been discharged.
Getting confirmation that you have been discharged
You can ask for a confirmation letter that you have been discharged from the Insolvency Service by emailing them at discharge.queries@insolvency.gov.uk – this is free.
Some lenders, especially mortgage lenders, may ask for a Certificate of Discharge.
How you get this depends on how you went bankrupt:
- if you applied for bankruptcy online email the Insolvency Service at discharge.queries@insolvency.gov.uk and ask for a Certificate of Discharge. This is free.
- if you were made bankrupt by a creditor – complete form LOC013 and send it with a cheque payable to ‘HM Courts and Tribunals Service’ to the court that made you bankrupt. It costs £70 for three copies of your Certificate of Discharge and £10 for additional extra copies.
What happens when you are discharged
Release from your debts
When you are discharged you are released from the debts that were included in your bankruptcy. These includes any debts you forgot to put on your bankruptcy application form. It doesn’t apply to debts such as student loans which couldn’t form part of your bankruptcy.
Your bankruptcy ends, you are no longer bankrupt!
Things you no longer have to tell the OR about
After discharge, you don’t have to tell the OR about assets or money that you receive, unless you were already entitled to these before your discharge.
The events you no longer have to tell the OR about include:
- receiving redundancy money (see Redundancy and bankruptcy);
- getting an inheritance (unless the person died before you were discharged, see Inheriting money when bankrupt); and
- a pension lump sum or money you withdraw from a pension (see Bankruptcy and Pensions).
There is a small exception here if you are paying an IPA/IPO, see below.
So the reader can safely be given money by her grandmother – it won’t be at risk at all.
And she can save as much as wants. She could have saved a small emergency fund before discharge, but few people can afford to save much at that point.
Bankruptcy restrictions that end
The restrictions of bankruptcy also end when you are discharged, unless you have a BRO/BRU, see below, so you will be able to:
- borrow more than £500 without telling the lender you are bankrupt (but if a lender asks if you have ever been bankrupt or insolvent, you still have to reply Yes);
- be a company director;
- change the name of your business if you’re self-employed; and
- buy a council house using the ‘right to buy’ scheme.
BRO/BRUs – restrictions still apply
The government says “Any dishonest or blameworthy behaviour could lead to a BRO”.
That may sound alarming because most people who go bankrupt think they have been blameworthy to some extent…
But in practice very few people get BRO/BRUs. See Will you get a Bankruptcy Restriction Order (BRO)? Does it matter? for details.
If the OR has imposed a Bankruptcy Restriction Order (BRO), or you have agreed to a Bankruptcy Restriction Undertaking (BRU) you will still be discharged after twelve months and released from your debts.
But a BRO/BRU means you will continue to have a series of restrictions on what you can do for the period of your BRO/BRU.
Your possessions and assets
Personal possessions – normally safe!
Most people do not lose any personal possessions when they go bankrupt, see Will I lose my lawnmower? and other questions for details.
Most assets apart from your home that have to be sold are dealt with within the twelve month bankruptcy period.
In the unusual situation that you have assets that the OR has told you within the 12 months that may have to be sold, this still applies after discharge.
If you have not heard anything from the OR by the time you are discharged, that is the end. You will not be asked anything afterwards and nothing can be taken.
Family home
There’s a 3-year time limit for the OR to start legal action to sell the family home. If your share of the equity (or your “beneficial interest”) is less than £1,000 three years after you went bankrupt, no action will be taken, the interest will return to you and the restriction at Land Registry will be removed.
“The right to claim something” – an asset that still belongs to the OR
Sometimes you have a legal right to do something, for example make an insurance claim, ask for a refund, sue someone.
If you had this legal right before you went bankrupt, this right is an asset that transferred to the OR when you went bankrupt. It does not transfer back to you when you are discharged,
This may include any ongoing complaints and court cases, and also ones which have not yet been started.
That last point may be a disappointment. There is no point in you asking for a refund eg by making an affordability complaint for loans taken prior to your bankruptcy because if you win the complaint the money will go to the OR, not to you.
It doesn’t matter if these loans were included in your bankruptcy or had already been repaid, you will not get these refunds.
But you can make an affordability complaint about credit given after your discharge – then the money will come to you, not the OR. Any refunds for the loans before your bankruptcy will go to the OR.
IPA/IPOs – must be set up before discharge
If you don’t have an IPA/IPO
More than 80% of people who go bankrupt do not have an Income Payments Agreement (IPA) or an Income Payments Order (IPOs) set.
If you don’t have an IPA when you are discharged one can’t be set up later and you don’t have to tell the OR about any changes to your income or expenses.
(There is a very rare exception. When the OR has applied to court for an IPO before your discharge, then it can be set up afterwards. If this affects you, you will know about it.)
IPAs/IPOs carry on after discharge
Here you have to make monthly payments to the Official Receiver for three years from the point it was set up. During these three years, you have to tell the OR about changes to your income and expenses and the IPA may be adjusted.
Being discharged doesn’t change this.
You should also tell the OR about any windfalls that you receive after your discharge while your IPA is continuing.
This does not mean that the OR can claim your redundancy money or an inheritance where the death happens after you were discharged – this won’t happen, see the links above.
But some windfalls are actually a form of income, for example a refund from the tax man, and you may need to pay a lump sum to the OR for these.
Your credit record after discharge
The details of your bankruptcy are kept on the Individual Insolvency Register for three months after discharge. If you check the register after this, your name should no longer appear, unless you have a BRO/BRU.
Your credit rating won’t improve immediately after you are discharged.
It will take some weeks or even a month or two for creditors to mark your debts as settled/partially settled with a zero balance owing and the bankruptcy marker itself will remain on your file for another five years.
After a few months, you can start the credit repair process, including getting creditors to correct any records which are wrong. See How to repair your credit record after bankruptcy for details.
“What about… ?”
The Insolvency Service helpline can answer general questions, but if you have questions about your specific case, the best thing to do is to contact your OR’s office.
Bankruptcy & a new job or overtime
What happens when? A bankruptcy timeline
How can you start to save small amounts?
Jordan says
How does the official reviever or trustee know if you are changing jobs? I read everywhere that you notify them but surely they find out anyway?
Sara (Debt Camel) says
Hi Jordan, the simple answer is you should promptly notify them. If you don’t they are very likely to find out anyway because when you go bankrupt you have to sign a tax and national insurance disclosure form, which allows HMRC to pass information to the Official Receiver. this information will include the change of tax code when you change jobs.
Jan says
I became bankrupt in April with an IPA running for 36 months. What happens if I inherit property after my discharge but before the end of my IPA. Would I lose the property or is it untouchable at that point ?
Sara (Debt Camel) says
After your discharge that will be safe, see https://debtcamel.co.uk/inherit-money-bankrupt/
DC says
Hi, I was made bankrupt in 2010 and, as far as I can see am expecting it to be off my record in a couple of weeks time. The question that keeps coming to mind (and I find conflicting views on) is when confronted with the question “have you ever been made bankrupt? do I still have to answer yes even after it’s all cleared from my record?
Sara (Debt Camel) says
You do have to answer Yes.
Alice says
Hi, I was made bankrupt in May 2015 when does my name come off the insolvency register?
Sara (Debt Camel) says
If you were discharged after a year – and as this article says, almost everyone is – then your name will have come off the insolvency register 3 months later. So it should be gone by now or in the next week or so.
Penny says
Hi – I was made bankrupt on 14 March 2014. I was told I would be discharged after one year automatically and my name does not appear on the Insolvency register as at 26 October 2016. However, I have received a letter from someone saying they have been appointed as the Trustee of my estate by the Secretary of State with effect from 18 October 2016. He has also enclosed a “questionnaire for Undischarged Bankrupts”. What does this mean, what will happen and they are asking questions about the family home. This is mortgaged, with a mortgage outstanding of £311,000 and an approximate value of £250,000 – £275,000. It is jointly owned by my husband and me and we have two children aged 12 and 13 currently. I am concerned!
Sara (Debt Camel) says
It sounds as though there is a lot of negative equity. If this is still the case three years after you went bankrupt, the house should revert to you and will be safe. In the meanwhile, I suggest you ask why you have been sent a form for undischarged bankrupts when you have been discharged.
Simon says
Hi Sara, your site is excellent. The one question I cannot find the answer to however is how the bankruptcy option ‘more-permanently’ affects your ability to get a mortgage after the 6 years when it is struck permanently from your record (vs. say a DMP).
Does your answer above identity this i.e. even after the 6 years you will always still have to answer ‘yes’ irrespective of the credit repair work since?
Sara (Debt Camel) says
You do have to answer questions such as “Have you ever been bankrupt or in an IVA?” accurately. This article https://debtcamel.co.uk/bankruptcy-iva-dro-credit-rating/ looks at the issue of later mortgages in more detail.
Joseph says
One Has Read Through Many Of The Questions Sent To You And I Am Very Grateful For The Responses You Have Given Them. Bankruptcy Is A Lonely Place To Be And Having Just Applied For A Certificate Of Discharge All Your Answers Have Placed Me In A Better Frame Of Mind. Thank You.
Sarah says
It will be one year next week when I declared myself bankrupt. I still haven’t heard from the OR regarding a IPA. Should I still expect one to be issued
Sara (Debt Camel) says
Were you expecting to get an IPA? 80%+ of people don’t pay one. After your discharge next week, one can’t be set up, so your OR is cutting it a bit fine!
Sarah says
I filled in then I & E when I first declared myself bankrupt. Sent everything back and I’ve never heard anything since. I’ve been in such a state worrying about it ever since. It’s the anniversary on the 19/11. I’ve another week of worrying but knowing my luck I will get a letter next week
Chris says
If the mortgage is solely in my name but my wife and i moved in together 11 years ago will the house be classed as both of ours as she has paid 50% of all household bills including the mortgage since day one? If i have to go bankrupt can she buy my share of the equity and take on the mortgage in her name so the house is safe?
Sara (Debt Camel) says
Were you already living in the house when she moved in? If not, when you bought the house, where did the deposit come from?
PAUL MORGAN says
I was made bankrupt in 29/12/2011 and then discharged in 29/12/2012, also I am off the Insolvency website.
I was paying my official receiver £109.00 a month from 14/02/2013 to 14/01/2016 (3 years)
I then applied on 14/11/2016 for PPI from my bank Lloyds TSB which I was awarded £660.00 on 04/12/2016,
But because they said my financial affairs are being managed by an Insolvency practitioner, therefore the offered re-addressed payment will normally be an asset of my arrangement, and have made my payments directly to my Insolvency officer !
But I haven’t heard a thing of my Insolvency officer as of yet to tell me this,
Can they keep this money from me from my bank ? ? ?
Sara (Debt Camel) says
Yes, as you have been bankrupt any PPI reclaim will go to the Official Receiver. The only exception is if you had taken out credit with PPI after you had been discharged. See https://debtcamel.co.uk/ppi-iva-dro-bankruptcy/
James says
I’ve been discharged from bancrupcy 7 months now but I’m in a IPA am I allowed to get a credit card to start building up my credit score
Sara (Debt Camel) says
Yes, you can now borrow money as you are free from the bankruptcy restrictions. Read https://debtcamel.co.uk/credit-file-after-bankruptcy/ and also https://debtcamel.co.uk/bad-credit-cards/.
Hayley says
Hi, I was declared bankrupt in October 2015 so am now discharged. I intend to start an insurance qualification which my employer is paying for. I have advised them about my bankruptcy and they want to know everything about it and have asked for a copy of the discharge certificate but from looking through your very useful website, it appears that no certificate is produced, is that right? Also, if I inherit money or assets once I’ve been discharged, do I even need to tell the insolvency service as I believe any money I inherit I can keep? Thank you.
Sara (Debt Camel) says
You don’t automatically get a certificate. You can ask your OR for a letter confirming your discharge – that will probably be fine for your employer.
If you inherit now, it is all yours – providing that the death occurred after your discharge, as the above article explains.
Katie says
Hi I need some advise, I have recently completed bankruptcy application online. And told on the 20th that I have been declared bankrupt however have not yet had a telephone conversation with the or. My concern is that over the weekend me and my ex have decided to give things another go we have been split up for 7 months. We have 2 children and the only joint debt we have is a tax credit overpayment. We have not yet decided when he’ll move back into the family home he is currently private renting. Do I need to Inform the or that he may move in in the near future? My personal income will drop down to tax credits and cb only as I am not working so will be roughly 400 a month. He works full time and but is currently in a debt management plan. I am worried that by him moving back home I will loose my bankruptcy. We have talked and agreed that I would contribute to the housekeeping and fuel as he doesn’t drive. I do want to give my family another go but i am so worried that it will ruin my bankruptcy thanks
Sara (Debt Camel) says
You don’t need to tell the OR anything until your income & expenditure change ie not until he does move in.
At that point your expenses will drop (as he will be paying some of them) but your income also will as well. If your only income comes from benefits there is no danger that you will have to make monthly payments and the OR is not going to be very interested in the detailed calculations, but you should still tell the OR what is happening.
You can’t “loose” your bankruptcy. He is not going to be responsbile for your debts. I don’t know how big his debts are, but if his DMP is going to take many years, perhaps he too should be looking at insolvency?
PS some things matter more than money – I hope it all goes well when he moves back!
Jamie says
When I went bankrupt the main debt was a large tax bill from unpaid (self employed) tax. I had a bankruptcy advisor who said it was likely I would get a bankruptcy restriction order. I am now 5 weeks from the end of the bankruptcy, is it still likely that this may happen? Or is it more likely that this would have been initiated at the beginning of the bankruptcy?
Sara (Debt Camel) says
If the OR hasn’t mentioned this is being considered my guess is that it is now unlikely but still possible.
Zen says
Hi,
I had debt of around £52000. I lost my job on 13/12/2016. Currently I do not have any job. I have applied for Private Hire and Taxi license. I was a field salesman and was earning varound £60000 per annum. My income started falling from October 2015 because my health. I am not in position to do field sales job. I had discussed with a debt advisor and he advised me for IVA. Since I did not had any job he asked if I can arrange £12000 from friends and family. I arranged the money and then applied for IVA which was rejected. All the creditors had agreed accept Zopa who I had to pay £16268. I am applying for a bankruptcy.
I do not own any property. Only asset I have is 2 cars which is in my name the value of each is £1500 and £300 respectively.
Will my bankruptcy be approved by OR. Is BANKRUPTCY the only option for me. After rejection I was told by IP that bankruptcy is the only option left. What happens if my bankruptcy get rejected.
Thanks
Zen
Sara (Debt Camel) says
I can’t see why your bankruptcy wouldn’t be approved – you can’t pay your debts. Only exception would be if you are over 55 and have a large amount of money in a private pension pot.
It’s not clear to me that you have any other options, unless you expect to get back ato a well paying job in a year or two. Even if you do, 53k is a LOT of debt and if you have no assets bankruptcy could still be a good option.
You could talk to StepChange who could look at your whole case and give advice, not just on whether bankruptcy is your best option but also to talk through the practicalities so you are less worried by it.
reuben says
hi
my 12 months are up in October but I have an IPA to pay , I get the point about if you have a change to your income you should tell the OR but what if you acquire an asset such as a car or bike is there the chance that they can take it from you ?
thanks
Sara (Debt Camel) says
Before you are discharged, if you “acquire” a large asset then it may be classed as an “after acquired” asset and can be claimed by the OR.
After discharged, in general you can acquire assets and they are not at risk.
BUT if you are self-employed and are choosing to “pay” yourself with an asset and not treat it as income, that may be different. In general if you are trying to get around some rule (telling the OR about extra income) by doing something unusual then it probably isn’t a good idea! I suggest consulting an accountant or a solicitor if your business affairs are unusual or there is a lot of money involved.
Jane Toal says
I was discharged in August 2016 after one year i still pay the agreed monthly payments. I wanted to take voluntary redundancy and was told I would receive 22000.00. And spoke with my or who advised they would take 12000.00 from this. Is this right. I live in Scotland
Sara (Debt Camel) says
I’m sorry I can’t comment on bankruptcy in Scotland. I suggest you contact a Scottish adviser.
Emily says
I am so grateful I have found this page!
I was discharged from bankruptcy Oct 2015 however I’m still in an IPA until March 2018. I understand that if I change jobs or get a pay rise, or my bills change I would need to notify the OR.
What I’m confused about is lump sum money; for example, my nanny’s inheritance, PPI well before bankruptcy, for example back in 2006, winnings (like a lottery) or selling my house? The OR have given my house back to me as the equity is negligible, however, if I sold it in a year or so and made £5,000 for example would I have to give back the 5k?
Thank you.
Sara (Debt Camel) says
Any inheritances where the person died after the date of your discharge will come to you. Any lottery wins will as well.
Any PPI will go to the OR because the right to make the PPI claim was an asset at the start of your bankruptcupty which has transferred to the OR.
The OR should have clarified the position for your house. My guess is that if they have removed the restriction on it it is your to sell whenever you want and you don’t have to account to the OR for this. But I suggest you get this confimred with the OR in writing before you do this.
Jo says
Hi. I went bankrupt in November 2017. Was on maternity leave started work this month and I was honest with the official receiver I went back part time. They sent me a IPOQ form which is detailed I’m scared of an IPA yes my hubby pays more bills then me but we now have childcare. I’m worried in case they think or he should pay this but he has his own debts and we just survive now. I only come out with £1000 a month. I pay the childcare and contribute towards the bills but he pays the majority and has 2 other children to pay for. worried. If I don’t agree with the IPA amount if she gives me one can I say I will take this to court to be heard. Hubby can’t afford to pay more he needs his own money I pay my childcare out of my wages and contribute towards bills which leaves me with hardly nothing.
Sara (Debt Camel) says
If you are only working part time and you have childcare costs, you may well not have a problem. If your OR says you have to pay an IPA, I suggest going to your local Citizens Advice and they can help you with this. Yes, you can go to court, but these matters are normally resolved by discussion. The OR is a professional looking to apply the rules fairly, not out to squeeze as much out of you as possible.
A zee says
Hi…I can see you are very helpful..my bankruptcy discharge date on 5th may 2017 …and I have not heard anything from or from last 6 months .just wondering how do I know I am discharge?many thanks
Sara (Debt Camel) says
You can look up your details on the Insolvency Register here: https://www.insolvencydirect.bis.gov.uk/eiir/
Eliza says
Hello. I wondered if you could help me. I was made bankrupt in February 2014. In January 2015 by trustee applied to the court to have my bankruptcy discharge suspended. He was successful. However, I appealed this decision and 15 months later in January 2017, my appeal against the suspension was heard and I won my case. My discharge date was backdated – given as August 2016. Between the appeal date in January 2017 and the time when Judgement was given (which took 3 months), I didn’t hear once from my trustee. Then, once the Judgement had been made and my legal costs were refunded, I received a letter from my trustee asking for copies of my work invoices and bank statements since January 2017. My trustee has not got an incomes payment order in place. He wanted to get one but it was put on hold because of the appeal.
My questions are as follows:
1. If I am now discharged from bankruptcy (and have been so from August 2016), why can the trustee still demand copies of my work invoices and bank statements for the time period post discharge?
2. If he is allowed to do this, then why is he doing so and when / what will prompt the ending to this demand of information?
3. My trustee stated he was going to apply for a IPO in July 2016 and completed the application (this being a month before August, which was given by the appeal judge as my discharge date). Can he still apply for an IPO?
Thank you so much for listening to me – it is a frightening place and I literally don’t know when this is ever going to end. Thanks.
Sara (Debt Camel) says
It is possible for an IPO to be made after discharge if the court application was before discharge.
This could be what is happening here. If you would like advice and support through this process, go to your local Citizens Advice.
Laura says
Hi I was declared bankrupt April 2016 and have now been discharged. I am still self employed.
Do I have to pay tax for the year 16/17 and if I don’t do I pay money to the official receiver? I can’t seem to find an answer. Thank you
Sara (Debt Camel) says
Hi Laura,
if you went bankrupt before April 6th, this would have been in the 2015/16 tax year, in which case your tax for 2016/17 would be as normal.
On or after April 6th would have been in the 2016/17 tax year. In this case, assuming you were self-employed for the whole year, I understand the tax you would have paid to HMRC is instead paid to the Official Receiver. If you ask your OR’s office, they should be able to explain exactly how this is done.
Laura says
Thank you. It was after 6th. Will they contact me? Any idea when? Will I still need to pay even though I’ve been discharged?
Sara (Debt Camel) says
I don’t think your discharge changes what should happen to the tax in the tax year before your discharge. Presumably, you would normally complete a tax form. I suggest you ask your Official Receiver’s office if you should do this as normal and how / where you should pay the resulting tax.
Nick (Business Debtline) says
Hi Laura
I am a Team Manager at Business Debtline, a National Charity that gives free, independent debt advice to people who are self employed.
Sara is quite correct that you will not normally be asked to pay tax for the remainder of the tax year that you were declared bankrupt. There is an exception if you are paid under the Construction Industry Scheme (CIS) but other than that the zero tax rate should apply. However this only applies if you are a Sole Trader, the rules are very different if you are the Director of a Limited Company. I assume you are a Sole Trader?
Your OR should notify HMRC that you have been declared bankrupt and a note should then be placed against your Unique Tax Reference to show that you will be on a zero rate tax for the remainder of the tax year. You should complete your tax return in the usual way but declare no tax to pay.
The Official Receiver (OR) does not get paid the tax you were due to pay, but they will complete an Income and Expenditure with you which may result in a slightly higher surplus than usual (as you are not paying tax). If your surplus income exceeds £20 then the OR will usually ask to make payments towards the bankruptcy in the form of an Income Payment Arrangement (IPA) If they cannot agree this with you then they can apply to the court to make an Income Payment Order (IPO).
If you have been discharged then this will not change the situation regarding the tax, you should still be zero rated for that tax year. If your OR has not set up an IPA prior to your discharge then that should be the end of the matter and there should be nothing to pay unless they have already applied to the court, prior to your discharge, for an IPO (but I assume they would have made you aware of that if that were the case)
I hope that this has been of help, but if you have any further queries you may find our website useful, the link is http://www.businessdebtline.org.
Laura says
That is very helpful thank you. I was director but that got dissolved when I was declared bankrupt so have been sole trader from April 16 until now.
My accountant is in the process of sorting this and has been asked to send my accounts off via paper copy which I believe she has this week. My tax code wasn’t at zero through the year I don’t think? I have not heard from the OR since my bankruptcy. So as far as you’re aware there will be no monies to pay but you’re not 100%?
I appreciate your help. Thanks again.
Nick (Business Debtline) says
It sounds like there will be nothing to pay now? You may want to check with your OR to be certain and speak to HMRC regarding your tax as this should have been done for you, but the process I ran through is how things should work. So if there is no IPA set up and no court action pending then it sounds like things have come to an end now.
Unfortunately we can’t be 100% certain, only the OR can be 100% certain as they are the ones overseeing everything for you, but it sounds like things have come to an end
Laura says
Thank you for your help.
Stuart says
Hi I was bankrupt in may 2010. There wasn’t any equity in the family home then. I was discharged after 12 months as standard. We as a family are looking to relocate therefore selling the home. Now there is equity in it and was wondering if the official receiver has any claim to any of it.
Sara (Debt Camel) says
There is a three year time limit for the Official Receiver to take action over the family home. Have you checked to see if there is still a restriction at the Land Registry? If there isn’t you should be fine. If there is, contact the Official Receiver and ask what the situation is.
Stuart says
Thank you very much will do that.
Nikki says
Hello,
I was wondering if I work part time on zero hrs contract, how might an IPA work as my hours vary week to week?
Also if I am given an IPA, but may take a break from work, for 2months maybe, to visit family overseas, which may be just before I am discharged, if I return after discharge and start work again would I have to pay contributions again?
Many thanks
Sara (Debt Camel) says
Is your part time work well paid? Zero hours contracts usually aren’t. In which case it’s likely there will be no IPA, but this will depend on the facts of your case.
Have you actually gone bankrupt? If not, you would do better to take your break and visit family abroad BEFORE an IPA is imposed, not afterwards.
John Robertson says
Hi I was made bankrupt in Scotland in 2006 and was discharged in 2009. I was approached earlier this year 2017 by a PPI claim solicitors saying there had been some change in legislation and people like myself discharged from bankruptcy can claim PPI back from the creditors involved in their sequestration.
Q!: Is this correct?
Q2: Does any of the funds that any creditor pay me direct after admitting the mis- sold PPI still have to be declared to any trustee?
Q3: How long will it be until my trustee has been discharged from my bankruptcy also?
Q4: If my trustee has also been discharged does that mean I can keep any money rewarded back to me?
Q5: I have received some money back direct from creditors but my PPI solicitor has never advised me that I need to declare the money. They told me I could just bank the cheque is this correct? Obviously they get a percentage which I have already paid so not sure if they are entirely truthful?
Q6: Any credit following my discharge can have a PPI claim made and if any PPI is upheld I can keep those funds?
Sorry for so many questions.
John
Sara (Debt Camel) says
I am not an expert in Scottish insolvency. I strongly suggest you contact your trustee and ask them these questions.
1) not so far as I know, unless the PPI was paid AFTER your bankruptcy, in which case it all comes to you. Never trust a claims company to tell you the full truth :(
2) in England they would have to be.
3) in England they would already have been unless there was some particular reason.
4) not so far as I am aware, see (1)
5) see (1)
6) yes.
john says
Hi Sara,
Yes the PPI was paid to me earlier this week, eight years after my discharge so can I keep this money?
Sorry I’m still a little confused.
John
Sara (Debt Camel) says
Talk to your Trustee. Sorry, I could tell what the situation is in England, but there is no point in me guessing about Scottish insolvencies. I think there is a real risk this claims firm is not correct, I think you should find out the facts.
Nick Hardman @ Business Debtline says
Hi
At Business Debtline we do advise on Scottish Insolvency. Unfortunately the information your claims company seem to have given you is not correct. If the payment protection insurance (PPI) mis-selling took place before the date of sequestration, any compensation would vest with the trustee. This applies no matter when the claim is made. Therefore, even if a client and their trustee have been discharged from the sequestration, the trustee may be able to apply to be ‘re-appointed’ so that they can claim the compensation. There has been a change in legislation however this only applies to bankruptcies granted after 1st April 2015 so form the information you provided I don’t think this will apply to you I’m afraid
Sara (Debt Camel) says
Thanks for clarifying this, Nick.
Shelley says
Hi Sara
I was made bankruptcy in nov 2013 and discharged the following year. I have recently registered for self employed and received a letter stating my unique tax code because of my bankruptcy? I have no idea what this means? Can you shed any light? TIA
Sara (Debt Camel) says
No I haven’t come across this. It may be a mistake! I suggest you contact you official receiver’s office and ask.
Shelley says
Thank you .
Stephen says
Hi Sara
I’m aware that you’ve given the answer to this question BUT…I recently got told by Clarke Willmott that I DO have to pay my redundancy money to the Official receiver.
I was made bankrupt in Feb 2015, discharged in Feb 2016 but am still in an IPA (until April 2018), I was recently made redundant from my job and received £648 redundancy pay so I then informed Clarke Willmott and they said send them the redundancy details and today contacted me back and said I do have to pay the £648 to the official receiver? Even though Ive seen on this blog as well as other people on other forums saying you don’t have to after you are discharged(even if still in an IPA).
Sara (Debt Camel) says
Have they said this in writing? Did they give a reason?
You could go back to them and ask on what basis the money needs to be paid to the OR. Point out that after acquired property only relates to property acquired before discharge and redundancy payments should not be treated as income for the purposes of an IPA.
Stephen says
Sara,
Thanks for the reply – I contacted the Official receiver and explained what you said above, he said he would re-review the case and has now just emailed me back to confirm I can keep the redundancy pay(even though it’s not a big amount of money to most people) – it is to me after my job ending and am really grateful to you for explaining the situation so well. Thanks for your help.
Nicholas says
I went into bankruptcy July 2010. Discharge 12 months after, it remains on file 6 years (credit references). How am I affected from bankruptcy after this period?
Sara (Debt Camel) says
Are you saying the bankruptcy still shows? or that some of the debts in it are still showing on your credit records?
paul simpson says
hi ive just checked my credit file because i will be discharged from bankruptcy in 7 weeks there are searches done at least once a month over the last 10 months from insurance companies i have not tried for insurance plus from capital one says powered by clear score again i have not tried to get any credit will this have any affect on me thank you paul simpson
Karl says
Hi, I´ve had my automatic discharge in May 2015. In June 2015 I received a formal letter from the Insolvency Service confirming my automatic discharge. Ever since that day I havent heard anything from the OR. In April 2016 (so pretty much one year after my AD) I moved within London to another address and informed the OR from the new address via postal mail but I never got any confirmation. I heard from a friend that you usually pay a fee after your automatic discharge for the OR work but within this 11 month after my discharge I didnt get anything. The Insolvency Service has my phone number and my email address. Now this invoice topic got me worried as I never received anything and maybe the Insolvency Service never got the info about the new address and sent the invoice but I never got it and now I´m in debt. So my questions are, is there such an invoice (didnt find anything online) and until when after my AD do I have to inform the IS/OR about my address change. Must I do it even after one year after the automatic discharge? Any answer is much appreciated.
Sara (Debt Camel) says
People who have been discharged don’t normally get an invoice “for the OR work”. I suspect you are worrying about nothing – why don’t you call your OR’s office to set your mind at rest.
After you are discharged you only have to inform the Official Receiver of a new address if you have an IPA (monthly payments) or if there are still some assets which a Trustee is dealing with (typically a house).
John Miller says
Hi, I applied for involuntary bankruptcy in Feb 2015 and was discharged on Feb 2016, I also signed a BRU for 5 years. My question is, how long does my trustee in bankruptcy remain in place.
Sara (Debt Camel) says
Are you paying an IPA? Do you have any assets which have been transferred to the trustee?
John Miller says
No I am 72 years old and retired. I answered all the questions asked by the trustee and provided all of the paperwork requested including bank statements etc. I have not spoken to him since 2015.
Sara (Debt Camel) says
Well he probably isn’t doing anything. If it matters, you could ask the trustee?
Sasha says
Hello, I’ve been declared bankrupt in October last year, so am really looking forward to being discharged! I run a business with my husband – he is now the director, but I am 100% shareholder. When they were first appointed, the Trustee wrote to me saying that they are entitled to the dividends from the business. It is a new business, so no dividends to speak of at the moment. How long do they retain the rights to the dividends? Or does it revert to me after I’ve been discharged? Thank you.
Sara (Debt Camel) says
Hi Sasha, I suggest you talk to Business Debtline about this https://www.businessdebtline.org/
Nick Hardman says
Hi Sasha
It would depend whether you are in an income Payment Arrangement (IPA). An Income Payment Arrangement is an arrangement that your Official Receiver can set up whereby you are required to pay surplus income in to your bankruptcy for up to 3 years. This would only normally apply if your budget sheet showed that you had surplus income greater than £20 per month.
As any dividend would be classed as part of your income the receiver would effectively include this and be entitled to claim it as part of your IPA for its duration (up to 3 years).
If you are not in an IPA then once you are fully discharged the receiver would not be able to claim any dividends from you.
I hope that helps. If you do need any further help regarding this then you can contact us at Business Debtline either by phone, webchat or email. All contact details are on our website http://www.businessdebtline.org , we are open 9.00-8.00 Monday to Friday
Sasha says
Hi Nick, thank you so much for your answer. I am not in an IPA as my account doesn’t have any surplus income. Thank you!! Sasha
Neal says
Hi, my wife was declared bankrupt a number of years ago, due to an ex partner walking out and she couldn’t pay the mortgage on their flat alone. Her bankruptcy covered her half of the mortgage. Her ex partner then decided to take the flat back on and is now trying to sell it on. She is now discharged but her name is still on the loan agreement. If she signs the sale forms will she be subject to any responsibility for negative equity the flat my have? She has been discharged over five years.
Thanks
Sara (Debt Camel) says
No, she should not have any liability for any negative equity. She may want to confirm this with her OR.
Edwinmadden says
Hi I was I was bankrupt in 2007 but now I’m applying for a mortgage in 2017 I’m just wondering would I still have to get a bankruptcy discharge certificate to show to my mortgage lender
Sara (Debt Camel) says
I doubt it! But ask your mortgage broker. NB I always suggest you should go through a broker if you have ever been bankrupt. it would be bad luck if you applied directly to the only high street lender that would turn you down because of this ancient history, but it’s better to be safe and avoid any chance of this happening…
Edwinmadden says
Thanks for getting back to me so fast my broker seems to be working hard with it and he brought it up it would be a shame if I didn’t get my mortgage because of the ancient history
Sara (Debt Camel) says
If your broker thinks it’s a good idea then I suggest you do this…
Nicholas says
I had a ppi payout that went direct to my official receiver. The claims company that arranged the ppi was still trying to get their fees, (though they knew the payout. they were not informed that it went to the OR), strange! though I have written to the claims company for an explanation. In the claims company terms and conditions they state ‘they may terminate any agreement with a customer who has a bankruptcy’ notice they ‘may’. If I could have a understanding of this please?
Sara (Debt Camel) says
I suspect it means that if they have started work on your case and you go bankrupt they will stop work – in which case it doesn’t help you at all.
I suggest to tell the OR that you are being chased by the Claims Co for fees.
Andy says
Hi Sara
I am due to come out of Bankruptcy on the 10th January. My Official Reciever passed my case to an Insolvency Practiioner at the request of the creditors. I recieved a letter on the 28th July about my income, expenditure etc. I filled it in straight away and sent it back. I haven’t heard anything since as I have shown I have no surpluss income however I still feel anxious that a letter will drop through the door at any moment about something else. Would you think they would have come back to me by now? I just want to get the next 3 months over with
Sara (Debt Camel) says
It’s natural to be anxious. Legally an IPA can be set up at any point until you are discharged. But if your I&E shows no surplus income then the chances are that you aren’t going to hear anything.
Andy says
Thanks Sara!
I just hope i hear ZERO from them from now till I come out of bankruptcy. I do admire people who have taken the extremley difficult step into bankruptcy as its very difficutl mentally to cope with at times
Craig says
Hi Sara, I’ve been taking your advice on the payday loans and also need something clarifying on bankruptcy. I was made bankrupt in August 2014, discharged 12 months later. I’m currently trying to improve my credit report after this and my payday loans and read here and elsewhere that when your discharged your debts should now class as settled on your report. Most did but I noticed 5 that are still showing a default each month. I sent an email to co-op that i had a smile cc with and questioned it and they said it will keep doing that until 6 years from discharge, is this right?
Sara (Debt Camel) says
No it’s not right. This article looks at what you should do to get this corrected: https://debtcamel.co.uk/credit-file-after-bankruptcy/
ceri jonathan says
hi i was declared bankrupt on the 8th of november 2016,my bankruptcy ends on the 8th of november 2018,would my trustee in bankryptcy have to notify me if he was considering not to discharge me?
Sara (Debt Camel) says
“my bankruptcy ends on the 8th of november 2018” did you mean 2017 – ie tomorrow?
Ceri says
Yes 8th of November I have not heard anything from my trustee
Sara (Debt Camel) says
ok, you typed 2018 by mistake then.
Yes, you should have heard before now if the trustee was going to try to suspend your discharge.
Ceri says
Sara
Many thanks. Therefore I am automatically discharged from tomorrow then?
Stuart says
Hi
I was declared bankruptcy on the 22/10/12 and declared all assets including my home,commercial property and land that I owned.the commercial property was took off me straight away and my house was re vested back to me two years ago but nothing was said about the land.I contacted my trustee about 6 months ago to inquire but he said he knew nothing about it.I contacted them a short while ago and asked again and gave them the deed title number as it was still showing there was a bankruptcy order against it..They have since told me that they have got to look into it because it’s a fair size bit of land. Should they have re vested it back to me now because it’s been more than five years after bankruptcy?
Thanks
Stuart
Sara (Debt Camel) says
So far as I know, the three year rule only applies to the family house, not your other assets.
Kate says
I just wanted to share my success reclaiming PPI from Barclays. I had my account since I was a kid and had 2 loans (paid off), a current accout (paid for) and then a Barclaycard before making myself bankrupt (balances on O/D and B/C) in 2009. I knew the PPI was missold as I wasn’t ever given an option to opt out/refuse it and asked for refunds before I went bankrupt but got the brushoff with a snooty letter. It wouldn’t necessesarily have stopped the bankruptcy but would have made a hefty dent in what I owed. So I never really forgave them for that. Around the start of November I filled in their online form to start PPI reclaiming, even though I knew any money would go direct to the Official Receiver, even though I ws discharged in 2010. Fine by me. By 15th I’d had 2 letters and 3 amounts £1400, £1300 and £600 repaid – to the OR but with 20% tax taken off the refund element of the larger amounts – about £300 which has gone to the taxman. I’m assuming that I’ll get this back when HMRC sort out my tax this/next April (I’m not paying tax atm as I’m a mature f/t student). Anyway – it was really quick and I feel good that greedy Barclays had to pay out. I’m now wondering if I could have done this with all my creditors, might I not have needed to go bankrupt at all?
Sara (Debt Camel) says
I suppose it depends how large your debts were when you went bankrupt and how much other PPI there was. An annoying thought – but it’s all past history now.
Andrew says
Hi Sara
I am due to come out of bankruptcy on 10th January (cant wait). I still get the odd letter from creditors saying I owe money etc, they where included in the bankruptcy but they still contact me. Will this stop once their files have been updated? Also is there anything that happens after my bankruptcy release date?
Jason says
Hi Sara! I’m due to come out of bankruptcy on 22nd of next month (December 2017) and I’m already having interviews for full time work as opposed to my current part time job. My question is this, if I’m successful with one of the positions should I tell then I can start on the 22nd of next month (the day I leave bankruptcy) or should I say I can start the 23rd, the day after leaving bankruptcy?
IE, should I leave a 24 hour grace period or use the day I leave bankruptcy of the 22nd to start my new job?
Thank you.
Ps. I have no owing of money, just and date of 22nd with nothing else open.
Sara (Debt Camel) says
I assume you are worried about having an IPA/IPO. Your OR/Trustee has to apply for an IPO before you are discharged. As you aren’t going to get paid until January, I don’t think you are going to have a problem with either the 22nd or the 23rd. In practice the 23rd is a Saturday and most employers would probably rather you start after the Xmas break… good luck with your job hunting.
Jason says
Thank you for your reply, this is what I was thinking too but surely I would have to provide NI details etc on acceptance of the position which may be before the 22nd, I just don’t want to have to jeopardise anything as I’ve waited so long for the 22nd to arrive so I can start again in full time work. I don’t even have my own bank account I have to use my partners account to get paid into from part time position.
So in short as I’ve heard nothing from them in months, a start date hiperthetically speaking of the 22nd should be OK?
Thank you Sara
Sara (Debt Camel) says
I don’t think they can impose an IPO for income which you haven’t yet received. Especially as you may pick up extra costs (travel to work) and possibly lose some benefits. But it’s natural to feel a bit paranoid, so perhaps tell the new firm you would like to start after Xmas, then you can relax.
Jason says
I shall do that, thank you very much for your advise today and have a happy Christmas
katie says
Hello,
looking for some advice, I was decalred bankrupt 20th jan 2017. due to be discharged in a few days.
I was single when i was declared bankrupt, claiming housing benefit I got back with my partner feb 2017 he moved in and housing benefit took a a payment back of my rent leaving me in arrears. I have been paying this back for the past 8 months, should i have been ? or should this have been included in the bankruptcy. I made the or aware my partner moved in they were not interested in his earning he is also not on the teancancy agreement housing assoication landlord.
Also this month due to unforceen car issues i have missed my rent , the only income i receive is child tax 396 per month and cb 137. my partner works but is not on the tenancy.
the housing association is being very awkward with me stating court action for this one month of arrears, can I state to them i am bankruot and and can this be included or not because its after my bankrupty date however not discharged until 20th of jan 2018.
regards
katie
Sara (Debt Camel) says
Your recent rent arrears should not be included in your bankruptcy as they happened after you went bankrupt.
I suggest you talk to your local Citizens Advice re the housing benefit overpayment issue and whether that should have been included in your bankruptcy. Also about your current rent arrears and what you should do now.
Clare Hebberd says
Hi My husband was made bankrupt in 2010 and cleared in 2011, Everything has been quiet since but this week he received a cheque for £330 from one of our creditors saying it was from interest charge on a loan and should have been repaid to us in 2009, but this was one of the debts that was included in the bankruptcy, Is this a common thing and are we allowed to cash it, It doesn’t make sense that we owed them money yet they are paying us a refumd, Also do we need to inform the OR or pay it to them
Thanks
Sara (Debt Camel) says
This would have happened because the lender realised they had made a mistake affecting a lot of people and, very embarrassed, they decided the best way to put it right was simply to refund the money in all situations. So a computer trawl generate all the refund lenders and cheques.
I am afraid you should inform the OR who will probably want the money :(
AFNAN KHAN says
HI
i was made bankrupt in may 2016, been told i will be discharged after a year which is 2017. Can i be a company director or would i not be able to yet as i know already i can become sole trader already
Sara (Debt Camel) says
When you are discharged, you can be a company director unless you have a BRO/BRU. These are rare and you would know if one was likely.
Brian says
Hi there,
Came across this site, it has been great help. Just a bit nervous about writing this as you may have answered it previously but I haven’t seen it. (Sorry if it has been answered)
I was made bankrupt (personally) from creditors in mid Feb 2017, my discharge is coming up in 2 weeks time mid Feb 2018.
I have had contact from the OR last year back in Feb, March, June and in October 2017 requesting income forms to be filled in signed etc which I did but I have never heard from the OR since, I am NOT on a payment plan or any payment scheme IPO.
I have filled / signed in all the income forms etc and followed the correct process when ever the OR has needed any paperwork or banking statements or access to accountants with wage slips or invoices for working as a sole trader, I have sent as per request.
I am a bit nervous / paranoid about it all as I see other people making IPO payments etc and I have also seen others have discharge suspended. I have not received any contact from the OR since October (nearly 4-5 months ago). From past experience, should I expect the OR to contact me over the next 1-2 weeks prior to the discharge requesting further information etc or trying to get me on a IPO? or would this have happened a few months back?
Any advice would be great. Thanks Brian.
Sara (Debt Camel) says
Typically you would have been contacted earlier if an IPA was going to be asked for, but the OR does have up until your discharge.
It is VERY rare for discharge to be suspended. Unless there is something unusual about your case, this isn’t something you need to worry about.
Derrick Saunders says
Hi,
I was declared Bankrupt in February 2010 and discharged a year later. My wife and I had a joint mortgage on the property which was in negative equity and were joint owners. During the Bankruptcy period, I purchased my share of the Beneficial Interest on my home back from the OR and I still have the documents.
Tragically my wife passed away last year and I now want to pay off my mortgage. ( The property is still in negative equity).
When I asked the Lender for a redemption figure they told me that It would have to go through their legal department as there was a bankruptcy involved previously.
To be honest this has got my alarm bells ringing as i don’t want to part with my money if the OR or anyone has a claim on my home?
Any advice would be gratefully received,
Thanks in advance
Derrick
Sara (Debt Camel) says
From what you say, the OR should be happy to confirm to you and to the lender that they have no interest in your house.
claire painter says
Hi, a friend of mine has just had a call from the insolvency office regarding a bankruptcy application. She has said that it has all gone through but a payment of £25 per week has to be made for the next 12 months to the creditors. Do you know why? Surely if bankruptcy is declared then there is no funds to repay any debt.
Sara (Debt Camel) says
She needs to talk to the Official Receiver’s office handling her bankruptcy and ask about this.
There are two possibilities:
1) this is an “IPA” but here payments have to be made for the next 3 years not 12 months. Less than 1 in 8 people who go bankrupt have to pay an IPA, so unless your friend is well off, this is unlikely. (Well off people do go bankrupt. They may owe £50,000 and be unable to repay it but could afford say £100 a month)
2) it could be for the income tax she pays. For the rest of the tax year when you go bankrupt, you don’t pay any income tax but the money goes instead to the Official Receiver’s Office. If it is for this, the won’t be any worse off. BUT this would normally only be for the rest of this tax year, ie up until April, not for 12 months.
I am concerned about what she has been told and whether this could be a scam. The 12 months timescale doesn’t sound right AND the OR will usually ask for monthly payments.
I want her to be VERY sure she is actually going to be talking to her Official Receiver’s office. Not some telephone number she was given on the phone. If she isn’t sure, she should call the Insolvency Enquiry line on 0300 678 0015.
Can you let me know what happens?
Dawn france says
Hi i went bankrupt in september 2015. I included the house in this as i could no longer live there. I tried everything to hand it back but as my ex is no where to be found i couldnt. It was eventually reposessed. I have now had a bill for the defecit as it was sold for a lot less than the mortgage. Putting me back in debt. Can this be re fereed to my bankruptcy as i put the house and my secured loan in it originally? Thanks
Sara (Debt Camel) says
Yes, the secured loan and mortgage were included in your bankruptcy, you don’t owe this money. See https://debtcamel.co.uk/repossession-deed-of-acknowledgement/.
Carole mcghie says
Hi went into bankruptcy in October 2012 can I start applying for a credit card once bankruptcy in October this year has finished (6yrs) also how do I get the bankruptcy removed from my file I never had any assets or had to pay an IPA.
I have tried to improve my credit score I have had a monthly bill for mobile phone for past 4yrs and not defaulted also a payday loan a couple of times no defaults does this all help
Sara (Debt Camel) says
Read https://debtcamel.co.uk/credit-file-after-bankruptcy/.
Payday loans do NOT help your credit record, other lenders may see them as a sign you have problems. Avoid them from now on!
Nick says
Hi Sara,
I was declared Bankrupt in April 2016 and discharged a year later. I have just received a cheque as a refund for inappropriately charged fees to a mortgage which was closed and paid up in full in 2010 when the property was sold. This Mortgage had no bearing on my bankruptcy which was 6 years after the sale date.
Does the Receiver need to be informed about this windfall/refund?
Thanks in advance
Nick
Sara (Debt Camel) says
Yes you do need to inform the OR who will probably claim the money.
Nick says
Hi, thanks for reply. I just spoke to OR and they made a note of it on my file, and informed due to circumstances on my case I was ok to keep it :-)
Sara (Debt Camel) says
That’s good, and I bet you are pleased you checked!
Andrew says
Hi Sara
I was discharged from my bankruptcy on 10th January 2018. I wasn’t in an IPA or anything it was a straightforward case. However the OR did pass back in July 2017 my case to an Insolvency Practitioner because that was what the creditors wanted. Back ini August 2017 mid way through my bankruptcy I filled out an expenditure form and sent it back. Never heard anything back. However I have just been sent another one (think its 6 months since the last one) hence this has got me worried as I am discharged and I wasnt in an IPA. Wondering if its just an auto renewal type thing, what do you think?
Sara (Debt Camel) says
I am assuming you don’t own any property?
If you don’t, I don’t know what this is for – I suggested you ask – I would be interested in the answer.