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What does 'undischarged bankrupt' mean?

Posted 04 April 2013

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Undischarged bankrupt is a legal term for someone who is still going through bankruptcy and is still subject to the financial restrictions of their bankruptcy.

Bankruptcy is a way of dealing with debts that you cannot afford. For some people, it really is the best way to deal with unsecured debts like credit cards and loans if they get out of hand.

Bankruptcy is a court process, and there are often legal names for things that happen in it. One you might have heard of is 'undischarged bankrupt'.

book and pens

What does undischarged bankruptcy mean?

An 'undischarged bankrupt' is someone who is still going through the process of bankruptcy - which usually takes one year.

Financial restrictions are placed on 'undischarged bankrupts'. Restrictions include what they can and can't spend their money on, how much money they can borrow, and which assets they are allowed to keep, or have to sell.

An 'undischarged bankrupt' may also need to make monthly payments to the 'trustee' (the person who manages the bankruptcy). A portion of these payments would go to their creditors to repay their debts.

You stop being an 'undischarged bankrupt' once you're 'discharged' by the court from your debts. These days, this usually happens automatically 12 months after the bankruptcy order was made, unless there's a good reason for it not to.


What happens when you're 'discharged' from bankruptcy

When you are 'discharged' from your debts, the bankruptcy restrictions are lifted. You are freed of the responsibility of paying the rest of your debts, with some exceptions. Debts that cannot be 'discharged' include:

  • • Money you owe because of family court proceedings
  • • Court fines
  • • Debts that have come about because of crimes, including fraud
  • • Debts that came about after the bankruptcy order was made
  • • Student loans


Keep in mind, any assets that were claimed while you were 'undischarged' remain under the control of the trustee and could still be sold after you're discharged; however, once you're discharged, lenders have no claim on any new assets you buy.

The insolvency register

Your details will remain on the Insolvency Register for three months after your discharge, but your bankruptcy could have an effect on your borrowing for longer. It'll stay on your credit record for six years from the day it started - and if you apply for a mortgage, for example, you might be asked if you've ever been bankrupt.



by Christine Walsh

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