Check which debts bankruptcy covers
Going bankrupt means you aren’t liable for most of your debts and you don't have to pay them.
Bankruptcy doesn't cover all debts so it's important to make sure you know whether any of your debts won't be covered and put plans in place to deal with them.
You might need to:
- keep paying some debts while you’re bankrupt
- stop paying some debts, but start paying them again when your bankruptcy ends
You can’t usually include a debt in your bankruptcy if it started after you went bankrupt. If you forget a debt that started before you went bankrupt, you can usually include it in your bankruptcy.
The person who deals with your debts after you go bankrupt is called the ‘official receiver’.
Check what to pay while you’re bankrupt
You still have to pay:
- student loans
- maintenance payments and child support payments, including any lump sum orders and costs from family proceedings, although you may be able to ask the court to order that you don't have to pay this debt
- magistrates court fines
- any payments a court has ordered you to make under a confiscation order, for example, for drug trafficking
- debts you owe because of the personal injury or death of another person, although you might be able to ask the court to order that you don't have to pay this debt
If you have a mortgage or debt secured on your home
You’ll need to keep paying your mortgage and any other debts secured on your home - for example, debts secured with a charging order. If you fall behind with the payments, bankruptcy won't stop your mortgage lender from taking steps to repossess your home.
If you have an income payment agreement (IPA) or income payment order (IPO), tell the official receiver you need to keep paying a secured debt. Ask them if you can pay less under the IPA or IPO so you can keep paying the secured debt as well.
If your home is repossessed and sold, but doesn't raise enough money to pay off your outstanding mortgage or any other debt secured on it, the remaining debt will no longer be secured. This means you'll be released from it at the end of your bankruptcy. The remaining debt is called 'mortgage shortfall'.
You'll also be released from a mortgage shortfall if your home is sold after your bankruptcy has ended.
If you have rent arrears
If you have rent arrears for your home, they'll be included in a bankruptcy order but your landlord could still take action to evict you. It’s important that you make a plan to pay your rent arrears during or after bankruptcy if you want to keep your tenancy.
If you have an income payment agreement (IPA) or income payment order (IPO), tell the official receiver you have rent arrears. Ask them if you can pay less under the IPA or IPO so you can keep paying the rent arrears as well.
If you have something on hire purchase
If you have an income payment agreement (IPA) or income payment order (IPO), contact the official receiver. They’ll tell you if you can keep making the hire purchase payments.
If you don’t have an IPA or IPO and you want to keep an essential item like household goods or a low value car, you’ll need to make an arrangement with the lender to keep paying for them. The bankruptcy won’t stop the lender from taking action to get the goods back if you stop paying.
Some hire purchase agreements say the lender can take the goods back if you go bankrupt, even if you keep making the payments. If your lender decides to do this, tell them you can still make the payments and ask them to let you keep the agreement. If they don’t agree, they might let a family member or friend make the payments for you.
If the goods have been repossessed already then any debt outstanding will be covered by the bankruptcy.
If you owe money to people or companies in the EU
Debts to people or companies in the EU might not be covered by bankruptcy.
If you live in the EU, your creditors could take you to court in the EU.
If you live in the UK, EU creditors have to sue in the UK rather than in the EU, even if they have an existing judgement. The UK will recognise EU judgements entered or started before 31 December 2020.
If you live in the UK but have a home in the EU with a mortgage from an EU lender, the lender could take you to court in the EU.
Get legal advice if you have creditors in the EU. Find free or affordable legal help.
Check what to pay after your bankruptcy ends
Some debts are paused while you’re bankrupt, but you have to start paying them again when your bankruptcy ends. This is called being ‘liable’ for the debt.
If you’re liable for a debt, you have to pay it if the lender asks you to.
If you have a benefit overpayment or social fund loan
If the Department for Work and Pensions (DWP) are taking money from your benefits to pay back an overpayment or social fund loan, they should stop taking the money while you’re bankrupt.
If they’re taking money for a social fund loan or an overpayment because of fraud, they’ll start taking the money again when your bankruptcy ends.
If the overpayment wasn’t because of fraud, you don’t have to pay it back after your bankruptcy ends.
If you gave the wrong information to get credit
You might have given a lender the wrong information if you told them something that wasn’t true, or if you didn’t tell them something they asked you about.
If you gave a lender the wrong information, the official receiver might decide you took out the debt by fraud.
The official receiver has to take your circumstances into account when they decide if it’s fraud. For example, they have to take into account if the lender told you to say you were earning more than you actually were, so you could get the loan.
If you took out any of your debts by fraud, you have to start paying them again after your bankruptcy ends.
If you have joint debts or a guarantor
If you owe personal debts jointly with someone else, you can include these in your bankruptcy. However, the creditor would then be able to chase the other person for the whole of the amount that is owed. They can do this whether the person is working or not.
You and the other person can each apply for bankruptcy individually, which would cover the joint debt. You will each need to pay a fee separately. You can't jointly apply for bankruptcy.
If you have joint business debts
If you have business debts that were taken out in a partnership, you can make a joint application for bankruptcy as long as all the partners agree. If you're thinking about doing this, you should take specialist advice.
- find out more about partnership joint applications on GOV.UK
- get advice from Business Debtline on their website
If you have a guarantor debt
If someone is a guarantor for a loan you’ve taken out, it will be included in your bankruptcy but the other person will still have to pay the debt.
If you are the guarantor and the other person fails to pay, it will be included in your bankruptcy and the creditor won’t be able to chase you for it - even after your bankruptcy ends.
Adding a debt after you go bankrupt
You can add a debt to your bankruptcy if you:
- took it out before you went bankrupt
- are told to pay it after you’ve gone bankrupt, but it’s because of something that happened before
For example, if you’re told to pay court costs or a benefit overpayment after you’ve gone bankrupt, you can add it to your bankruptcy if the court case or overpayment happened before you went bankrupt.
If you add a debt to your bankruptcy, it’s treated the same as the debts you included before.