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What Happens After Bankruptcy?

Last updated: September 17, 2021

The quick answer

When you go bankrupt your assets pass (or vest as it is called) to a Trustee in Bankruptcy. Usually, a year later your bankruptcy will end (called being discharged). You are then free to go on with your life, however, you may still have a trustee in place, especially if they have not been able to realise and sell your assets.

There are lots of myths about bankruptcy and every amateur has an opinion about what happens. In most cases, the myths can appear scary and do nothing to reassure you.

Usually, it is not as bad as it seems and bankruptcy can be a good and relatively painless option. However, if you own a home, a business, or are a director of a company, then your situation will be more complicated.

In more detail

The Usual Downsides To Bankruptcy Are

  • If there is equity in your home, it will have to be sold to realise the equity (although it can be bought by a family member).
  • You will lose other assets such as savings, high value cars, buy to let properties, shares in a company etc.
  • You may have to pay an amount of your surplus income for three years.
  • You cannot be a director.
  • It affects your credit rating for six years.

The Upsides Are

  • It clears your unsecured debts such as credit cards and loans.
  • Bailiffs have to now leave you alone.
  • It can be a great stress reliever.
  • If you do not own a house and only rent then you should not lose your home.

A Word Of Advice

It is very important to take proper professional advice before making yourself bankrupt or being made bankrupt (if you can afford it) just to understand what the effect will be and get answers to the questions you have.


If you need insolvency advice the earlier you talk to someone like us the better as you will have more options. We can help, contact us today.

More questions in this section

Author: David Kirk - ACA FABRP
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Just a quick email to say a heartfelt thank you for your very calm, considered, expert advice regarding my circumstances on Tuesday. Things looked bleak before you explained my options much more clearly, in simple layman’s terms.
Rob Elliott (14th December 2021)



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David Kirk

Licensed Insolvency Practitioner