If I'm declared bankrupt, will I lose my home?

Your home may have to be sold to assist with the repayment of your bankruptcy debts and applies whether your home is solely or jointly owned.

If you have a mortgage on your property, even if your mortgage payments are up to date, your lender should be notified of your impending bankruptcy.

Which creditors will be paid first?

The Official Receiver/trustee will ensure that your creditors are repaid in the following order:

1. Bankruptcy expenses incurred by Official Receiver or Licensed Insolvency Practitioner
2. Expenses related to the sale of any property
3. Any income tax owed for the year prior to bankruptcy
4. Any VAT owed for the period of 6 months prior to the bankruptcy
5. All other taxes owed from the year prior to bankruptcy
6. Any National Insurance contributions from the year prior to bankruptcy
7. All other creditors

What is an Annulment of a Bankruptcy Order?

An order of annulment can only be made by the court and is a procedure which cancels a Bankruptcy Order.

What is "Discharge from Bankruptcy"?

This is the process which releases you from the bankruptcy order and most of the debts which you owed at the date the order was made.

What if I can't work and am unable to make the repayments?

It is sensible to consider this at the time you take the loan out, if you are off work due to sickness, accident or if you are made redundant, you need to consider how you will make your monthly repayments. There are payment protection insurance (PPI) policies available to cover you in these situations. However, ensure you purchase your cover from a standalone provider such as British Insurance.com as they often provide much cheaper cover than some of the policies offered by mainstream lenders.

After being discharged from bankruptcy, are there any debts which are not written off?

There are a number of debts which can still be enforced if not fully paid under the bankruptcy order:

1. Court fines such as maintenance orders, Child Support Agency payments and any other fines made through family courts
2. Any debts included in the bankruptcy which were connected with fraud
3. Money owed to the Student Loans Company
4. State benefit overpayments
5. Secured Creditors

However, the discharged bankrupt can request the court's permission not to pay the debt being pursued on the grounds of having recently being discharged from the bankruptcy order. In such cases, unless the pursued debt is related to fraud, the court can agree to such a request at its discretion.