What is...

Bankruptcy

Bankruptcy is one of several types of personal insolvency. Other types of insolvency include Individual Voluntary Arrangements (IVA) and, in Scotland, Trust Deeds and Sequestration.

How do I check the status of my Bankruptcy?

Your Bankruptcy will be recorded on your Credit Report, showing whether it’s active or discharged, the start date, which Credit Reference Agencies are reporting it, and more.

checkmyfile collects your data from all four Credit Reference Agencies onto a single online platform, making it easy for you to see what lenders see.

You can check your Multi Agency Credit Report free for 30 days, then for just £14.99 per month. Cancel online anytime.

What happens once you are declared bankrupt?

Once a person is declared bankrupt, their financial affairs are managed by either a Trustee or by the Official Receiver, who puts together a Statement of Assets and Liabilities, and then works out how much can be repaid to creditors. This is usually a very small proportion of the amounts owing.

By law, bankrupts cannot be pursued for any debts that have been included in the bankruptcy, so one of the benefits of being declared bankrupt is to put a metaphorical umbrella up to shelter from the pressures of being chased for debt.

Bankrupts may not practice certain professions, such as lawyers and accountants.

How does bankruptcy affect my ability to take out credit?

Regardless of whether a bankruptcy is active, discharged or settled, it can continue to have a considerable impact on the person’s ability to take out credit - potentially indefinitely. When applying for some loans (mortgages in particular), the lender may ask if you’ve ever been declared bankrupt. At this point you are legally obliged to disclose the state of any bankruptcies, and if you do not, the lender has the right to withdraw their offer at any point.

In addition to your Credit Report, your bankruptcy will also be recorded on the Bankruptcy & Insolvency Register, which is free to view to anyone, which means it is available for lenders (and potential landlords or employers) to check at any point. Lenders are permitted to lend small amounts to bankrupts (approximately £500) but few do, as it has proven to be a strong predictor of future financial problems.

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