Bankruptcy is one way for individuals to deal with debts they cannot pay. It does not apply to companies or partnerships.

The bankruptcy process:

makes sure your assets are shared among those you owe money to (creditors)
lets you make a fresh start free from debt (with some restrictions)

The early stages of a bankruptcy are normally handled by an official receiver. An official receiver works for the Insolvency Service and is attached to the court. They will also be your trustee unless an insolvency practitioner is appointed to take over that role. The trustee will realise (sell) any assets (except any reasonable domestic items and items needed for your job).

The official receiver will write to you within 2 weeks of the bankruptcy order being made, explaining what you need to know and what you must do.

You must:

• give the official receiver information on your finances

• give the official receiver a full list of your assets

• tell your trustee about any rise in income during your bankruptcy

• tell anyone who offers to loan you over £500 that you’re bankrupt

• go to court to explain why you owe money if asked to do so

There are also things you cannot do while bankrupt. These are called restrictions.

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There are usually better solutions now than bankruptcy for example a DRO or MAPP.