Bankruptcy is a formal legal procedure that stops all creditors you have pursuing you for money.

Bankruptcy can be entered into either by way of applying yourself, which is called a Debtor’s Petition, or alternatively, by being forced into it when a Creditor petitions for your Bankruptcy and this is called a Creditor’s Petition.

Both methods achieve the same end result, in that your Creditors cannot pursue you for any outstanding monies but you will lose the majority, if not all, of the assets that you own at the time you are declared Bankrupt.

If you wish to declare yourself Bankrupt, i.e. a Debtor’s Petition, you apply online at www.insolvencyservice.gov.uk and the application process is fully explained, together with details of the fee that you will have to pay in order for the process to start.


If a Creditor wishes to petition for your Bankruptcy, they may do so if they satisfy one or more of the following criteria:

  • The debt that you owe must be in excess of £5,000.
  • You have an unsatisfied Court Judgement against you personally.
  • You have a failed Individual Voluntary Arrangement that stipulates the Supervisor should petition for your bankruptcy.

If a Bankruptcy Order is made against you, your case will initially be dealt with by the Official Receiver, however, in cetain circumstances, an independent Trustee In Bankruptcy, who will be a licenced Insolvency Practitioner, may be appointed to oversee the realisation of your assets and distribution to your Creditors.

If you have the threat of Bankruptcy against you, or are considering that you wish to petition for your own Bankruptcy, it is very sensible to take independent advice, to ensure that the path that you are choosing, or being forced into, is the correct one for your situation.

Bridgestones can discuss Bankruptcy with you and indicate where you will be able to find further information that may assist in your decision, or provide you with information about alternatives that could be suitable to you.


If you are declared Bankrupt, you should be aware that there are certain restrictions imposed upon you for a period of 12 months from the date of your Bankruptcy, or longer if you fail to interact with the Official Receiver or Trustee In Bankruptcy and these are as follows:

  • You may not incur credit in excess of £500 without informing the person lending you the money that you are an Undischarged Bankrupt.
  • You may not be a director of a limited company.
  • You may not hold certain professional offices or be employed in certain areas.
  • Any assets that you own at the date of your Bankruptcy will not be returned to you after a period of 12 months, as they form part of your Bankruptcy Estate that will be realised either by the Official Receiver or any appointed Trustee In Bankruptcy.

You should note that if you have an interest in a property, either owned jointly or solely, then your share of the equity will be realised at some point during the Bankruptcy, to be paid through to your Creditors, and this may take many years to be formally completed.  Again, if you think you have property that is at risk if you are declared Bankrupt, or declare yourself Bankrupt, you should take advice to ensure that the implications have been explained fully to you.