How Long Will Bankruptcy Affect Me - StepChange

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How long will bankruptcy affect me?

You are limited by the terms of your bankruptcy. This will last for at least 12 months.

Based on your situation:

• You may have to keep making bankruptcy payments
• It may be harder to borrow money in future
• Bankruptcy might still affect you after it has ended

The rules around debt relief orders (DRO) have changed. Please take a look. These changes could be better for people needing an insolvency solution. For some people a DRO is a cheaper option to bankruptcy.

Before going ahead with bankruptcy, it is important to get free and impartial debt advice.

How long does bankruptcy last?

You are subject to the terms of your bankruptcy for at least 12 months. Then you are usually ‘discharged,’ and the terms no longer apply.

Your discharge can be suspended if you break any of the terms or do not cooperate.

Find out how you are affected when your bankruptcy has ended:

• After one year
• After two years
• After three years
• After six years
• After 16 years
• Indefinitely

How long does bankruptcy stay on your credit file?

Bankruptcy shows on your credit file for six years or longer if it is extended. Find out more about bankruptcy and credit files.

How long does it take to go bankrupt?

Going bankrupt can be quick if:

• You get all the details the official receiver needs
• You have the money to pay your fees

You apply online and an adjudicator reviews your application.

Read our guide on how to go bankrupt for more information.

Worried about bankruptcy?

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Here’s what you can expect after bankruptcy.

12 months

You are discharged from your bankruptcy.

Most of your debts are written off but you still need to pay some like:

• Student loans
• Criminal fines
• Fraudulent debts

Some other restrictions end at this point too.

For example you can be a company director again, or you can borrow more than £500 without having to tell the lender about your bankruptcy.

A court can delay your discharge if you do not cooperate with the official receiver.

15 months after bankruptcy

This is when details of your bankruptcy are usually removed from the public Individual Insolvency Register unless you have bankruptcy restriction undertaking.

A bankruptcy restriction undertaking (BRU) or order (BRO) is applied if the official receiver finds you were dishonest or irresponsible. This means your bankruptcy stays longer on the public register.

Two years and three months

Your official receiver decides what to do with any equity in your home. They have two years and three months from the date your application was approved to do this.

Depending on how much equity you have, they might:

• Sell the property
• Apply a charging order to get the equity if you sell or remortgage in the future
• Give you the equity back if it is only small

They then have another nine months to take the action they have agreed.

Three years

Your official receiver has three years from the date your application is approved to deal with any equity in your home.

If you do not declare your property to the official receiver upfront, this three year period runs from the date they find out about it, not the date of your bankruptcy.

Three to four years

The official receiver may set an income payment arrangement (IPA) if you have money left over each month after living costs.

If you have an IPA:

• You make payments for a three-year period which starts in the 12 months before you are discharged.
• The last payment is somewhere between three and four years after your bankruptcy. You can still be chased for missed payments after this.

Six years after bankruptcy

Details of your bankruptcy will be removed from your credit file.

Your creditors should have listed your debts on or before the date of your bankruptcy.

This means all the debts from before your bankruptcy disappear from your credit file too.

Check your records with all three credit reference agencies to make sure this happened. You can now start rebuilding your credit file.

If the official receiver applied a BRU or BRO for more than six years, your bankruptcy will still appear on your credit file until this ends.

Sixteen years

Some BRUs or BROs last for up to 15 years. This could start any time before discharge, so could end up to 16 years from the date of your bankruptcy.

This type of action is rare, and would only normally happen with high-value fraud or other criminal activity.

Indefinitely

Details of your bankruptcy were recorded in The Gazette at the start.

You cannot prevent your details appearing in The Gazette and it will remain in their records permanently. Lenders use information on the credit reference agencies, rather than The Gazette, to decide if they will lend to you.

If you live in Northern Ireland, bankruptcy listings are also published in the Belfast Telegraph every Friday.

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