This guide tells you what happens if you are made bankrupt in England and Wales and about some of the alternatives to bankruptcy.

This booklet is for general guidance only. If bankruptcy proceedings are taken against you, or you are thinking of making yourself bankrupt, you should seek your own legal or financial advice from a Citizens Advice Bureau, a solicitor, a qualified accountant, an authorised insolvency practitioner, a reputable financial adviser or a debt advice centre.

Other organisations also offer insolvency advice and debt counselling. Some of them are entirely reputable and offer a professional service. However, others are controlled by individuals with no obvious qualifications who appear to be motivated mainly by a desire to exploit an already difficult situation. Beware, particularly of unsolicited approaches through the post or by telephone.

a. If you are not bankrupt

Bankruptcy is a serious matter. You will have to give up any possessions of value and your interest in your home. (Section 7 gives details of things you do not have to give up.) It will almost certainly involve the closure of any business you run and the dismissal of your employees. Bankruptcy will also impose certain restrictions on you.

You do not have to become bankrupt just because you are in debt. Look at the alternatives to bankruptcy as soon as possible in case they are more suitable in your situation. (See section 15.)

b. If you are already bankrupt

Sections 2-14 explain the bankruptcy procedure. The Official Receiver will give you further instructions. You can still propose a voluntary arrangement (details in section 15) which could annul the bankruptcy.

A separate leaflet called “Can my bankruptcy be cancelled? Information on annulment of a bankruptcy order” is available from your local Official Receiver’s office. You should consider this leaflet if you think that you should not have been made bankrupt or if all your bankruptcy debts and the fees and expenses of the bankruptcy proceedings can be paid or secured in full.

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