Can I go Bankrupt
- 23 Mar 2022
Whether or not you can go bankrupt in the UK will depend on a number of different factors. Most importantly where you live and the type of debt you have.
Included in this article:
- Where do you Live?
- The debts included in Bankruptcy
- Will your job be affected?
- What if you have gambling debt
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The information given on this page relates to England or Wales. The advice for going bankrupt in Northern Ireland and Scotland is likely to be different.
Where do you Live?
Whether or not you are eligable to go bankrupt in England and Wales depends on your Centre of Main Interest (COMI). This is usually where you permanently live and work (although it is not always the case).
You can only go bankrupt in England & Wales if your COMI has been in this country for the greater part of the last 6 months. Having said that you may still be eligable for up to 3 years after moving abroad.
If you have debts in other EU countries it might be possible to write these off by moving to England or Wales and then going bankrupt. However your COMI would have to be here for at least 6 months before you can apply.
You do not have to be a UK national to go bankrupt here. However your COMI (Center of Main Interest) must be in England, Wales or Northern Ireland
The Debts Included in Bankruptcy
You can only include unsecured debts in Bankruptcy. These are typically things like bank loans, credit cards and payday loans. In addition any money you owe to HMRC and self employed business debts can be added.
Secured debts such as mortgages, secured loans and HP agreements cannot be included. As such if you only have secured debt bankruptcy might not be a suitable solution for you.
There are also some unsecured debts that are not written off. These include student loans, CSA arrears and Court fines. You will have to add an allowance in your living expenses budget to continue paying these as required.
Bankruptcy could be an ideal solution if you have been left with a mortgage shortfall after your property has been repossessed. This debt is no longer secured.
Will your Job be Affected if you go Bankrupt?
Most jobs are not affected if you go bankrupt. Generally speaking your employer will not be told and you will be able to continue working as normal.
If you are self employed you will be able to carry on with your business. You just need to ensure you trade under your own name. You should be able to keep any tools and equipment you use personally to carry out your work.
There are some positions however which are affected. You will not be allowed to act as a company director while you are bankrupt. In addition you are prevented from holding some professional and financial services positions.
You can go bankrupt if you work for the police force or armed forces. However you will normally have to discuss your plans with a superior before applying.
Can you go Bankrupt if you have Gambling Debt?
There is nothing to stop you going bankrupt if you have gambling debt. Any debts you have built up in this way are written off just like any other money you owe.
However where you have this type of debt it is possible that a BRU will be issued against you. This would extend certain restrictions placed upon you after your discharge date.
A BRU is normally nothing to be concerned about. Unless you are a company director the implications are generally minimal.
Government advice about Bankruptcy
As well as the information found on this website the Government’s Insolvency Service has produced a useful guide to personal debt solutions which you might also find useful: “Options for paying off your debts”.
Money Helper (provided by the Money & Pensions Service) is an independent service set up by the Government to provide people with free advice about all aspects of personal finances. For further information, please follow this link: Help if you are struggling with debt.
It is also recommended that you read this one page document produced by the Money & Pensions Service entitled “Dealing with debt – 5 things you should know”.