Updated for 2026

Can I Go Bankrupt in 2026?

If you’re struggling with debt and wondering whether bankruptcy could be the right option for you, you’re not alone. Thousands of people across the UK consider bankruptcy every year as a way to get a fresh financial start. This guide covers everything you need to know about going bankrupt in 2026, including who qualifies, what it costs, and what alternatives might be available.

The information on this page is for general guidance only and should not be treated as financial advice. If you need tailored support, we recommend speaking with a qualified, regulated debt adviser.

What Is Bankruptcy?

Bankruptcy is a formal insolvency process that writes off most of your unsecured debts. Once declared bankrupt, your debts are managed by an Official Receiver, and after a set period (usually 12 months), you are discharged and most remaining debts are cleared.

It can offer genuine relief if your debts have become unmanageable, but it does carry consequences, particularly for homeowners and those in certain professions. You can read more about the full bankruptcy process here.

Who Can Apply for Bankruptcy?

You can apply for bankruptcy in England and Wales if:

• You owe at least £5,000 in debt (there is no upper limit)
• You are unable to pay your debts as they fall due
• You live in, or have a connection to, England or Wales

The application is made online through the Insolvency Service’s adjudicator system. A creditor can also petition to make you bankrupt if you owe them £5,000 or more.

How Much Does Bankruptcy Cost in 2026?

The current fee to apply for bankruptcy is £680. This is a one-off payment made to the Insolvency Service when you submit your application. The fee can be paid in instalments if you cannot afford the full amount upfront.

There are no hidden costs beyond this fee, though you should be aware that the Official Receiver may sell assets to repay creditors where possible.

What Happens to My Home and Assets?

If you own property, it may be at risk during bankruptcy. The Official Receiver or a trustee can sell your home to repay creditors, though they must consider the needs of your family. Certain essential items, tools for your trade, and everyday household goods are usually exempt.

Vehicles may also be affected, depending on their value and whether you need them for work.

How Long Does Bankruptcy Last?

Bankruptcy typically lasts 12 months from the date of the bankruptcy order. After this period, you are “discharged” and most of your debts are written off. However, some restrictions can last longer:

• A Bankruptcy Restrictions Order (BRO) can extend restrictions for 2 to 15 years in cases of reckless or dishonest behaviour
• Your credit file will show the bankruptcy for six years from the date of the order
• If you have surplus income, you may be asked to make payments through an Income Payment Agreement (IPA) for up to three years

What Debts Does Bankruptcy Cover?

Bankruptcy covers most unsecured debts, including:

• Credit cards and store cards
• Personal loans
• Overdrafts
• Council tax arrears
• Utility bill arrears
• Catalogue debts

However, some debts are not included in bankruptcy, such as student loans, child maintenance, court fines, and debts obtained through fraud.

Alternatives to Bankruptcy

Bankruptcy is not the only option for dealing with unmanageable debt. Depending on your circumstances, one of these alternatives may be more suitable:

• Individual Voluntary Arrangement (IVA): a formal agreement with your creditors to repay a portion of your debts over five to six years. Find out more about IVAs.
• Debt Relief Order (DRO): available if your total debts are £50,000 or less, you have minimal assets, and your disposable income is low. A DRO freezes your debts for 12 months, after which they are written off. Learn more about DROs.
• Debt Management Plan (DMP): an informal arrangement where you make reduced monthly payments to your creditors.

Not sure which solution fits your situation? Compare all available debt solutions to find the right path forward.

Will Bankruptcy Affect My Job?

In most cases, bankruptcy will not affect your employment. However, certain roles may be restricted, including positions in financial services, law, the police, and the armed forces. Company directors must also resign their position during bankruptcy unless they obtain court permission.

If you are unsure whether your job could be affected, it is worth checking your employment contract or speaking with a regulated adviser before applying.

How to Apply for Bankruptcy

Since 2016, bankruptcy applications in England and Wales are made online through the Insolvency Service. The process involves:

1. Completing an online application with details of your income, expenses, assets, and debts
2. Paying the £680 application fee
3. An adjudicator reviewing your application (usually within 28 days)
4. If approved, a bankruptcy order is made and an Official Receiver is appointed

You do not need a solicitor to apply, and the process can be completed from home.

Next Steps

If you think bankruptcy could help you get back on track, the first step is understanding all your options. Use our free tools to explore which debt solution might work best for your situation, or read our detailed guides on IVAs, DROs, and bankruptcy.

Remember, this information is provided as general guidance. For personalised support, always speak with a regulated debt adviser who can assess your individual circumstances.