For individuals


What is Bankruptcy?

  • An individual can make themselves bankrupt by submitting an online application to the Insolvency Service
  • A creditor owed at least £5,000 can petition for an individual’s bankruptcy by serving a petition on the debtor which may result in a Bankruptcy Order being made in Court
  • Following the making of an order the Official Receiver, a Civil Servant, is automatically appointed to act as Trustee in Bankruptcy
  • An Insolvency Practitioner from a private practise may subsequently be appointed to take on the appointment, possibly at the request of creditors
  • All the debtor’s assets “vest” in the Trustee


What are the advantages of Bankruptcy?

  • The individual’s debts are written off and no interest is payable
  • Automatic discharge after 12 months
  • Creditor’s approval or agreement is not required, unlike with an IVA


What are the disadvantages of Bankruptcy?

  • It involves the sale of any valuable assets, potentially including the matrimonial home
  • It may result in a 3 year Income Payment Order
  • The automatic discharge after 12 months may be suspended if there is a lack of cooperation with the Trustee in Bankruptcy
  • During the period of bankruptcy there are certain restrictions including not being able to act as a Director, incur levels of credit as set down in statute, carry on in certain professional positions etc
  • High costs that result in very low returns to creditors
  • Certain debts are not included, such as Student Loans, Court Fines and debts owed under family court proceedings
  • Seriously affected credit rating

If you would like to discuss any aspect of personal insolvency please don’t hesitate to contact DSi Business Recovery to arrange a Free and Confidential meeting on 01924 790880


Bankruptcy can offer a fresh start to some people, because your debts are usually written off and your creditors can’t take action against you. You’ll also normally be allowed to keep certain things like household goods and enough money to live on during the bankruptcy period.

However, bankruptcy may have a serious impact on your day-to-day life. You have to follow certain rules called restrictions during the bankruptcy period. The bankruptcy restrictions you’ll have to follow say that you can’t:

  • get credit of £500 or more without telling the lender about your bankruptcy
  • act as a director or get involved with setting up, promoting or running a company without permission from the court
  • carry out a business in a different name from the one under which you were made bankrupt, without telling everyone you do business with the name under which you were made bankrupt

You could also lose your home, be barred from working in certain jobs and find it very difficult to get credit for several years. This means it’s extremely important to find out about how bankruptcy would affect you, in your particular situation, and what other options you may have for clearing your debts before you decide to apply for bankruptcy.