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Life after debt

What happens when bankruptcy finishes?

Posted 13 March 2013

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In most cases, you'll be discharged from bankruptcy after a year. Click here to find out what happens next.

So you've come to the end of your bankruptcy. You're not an 'undischarged bankrupt' any more - you've been officially discharged.

That means the bankruptcy restrictions disappear and you're released from most of the debts you owed when your bankruptcy order was made. In most cases, this will happen automatically, even if you're still making contributions, or some of your assets haven't been sold yet.


How can I prove I've been discharged?

You might not need to, but if you do:

• You can write to the court and ask for a Certificate of Discharge if you need one, but this will cost you £70. You can even do this before you're discharged (just no more than 2 weeks before).
• You can ask the official receiver to advertise your discharge - but you'll have to pay for this.
• Or you can write to the office that dealt with your bankruptcy and they'll send you a letter that says when you were discharged. There'll be no charge for this.


Can I stop making payments?

If you're making payments under an IPO (Income Payments Order) or IPA (Income Payments Agreement), you'll have to keep on making them until your IPA/IPO comes to an end (which won't be any later than two years after your discharge).


What about my career?

As you probably know, bankruptcy can stop you doing certain jobs. But once you've been discharged, you can be involved in managing a limited company, or act as a director of one - unless you're subject to bankruptcy restrictions order or disqualification order.


What about borrowing money?

Again, now that you've been discharged, you'll be able to borrow without being forced to tell the lender about your bankruptcy unless you're actually asked about it.

You might find the question 'Have you ever been declared bankrupt?' on a mortgage application form, for example. If you do, you'll have to tell them about your bankruptcy.

And remember your bankruptcy will stay on your credit record for six years from the time it starts, so this can make it a lot harder to borrow money for the next five years.


Will people still know I've been bankrupt?

If you're thinking about the Individual Insolvency Register, don't worry - the record of your bankruptcy will disappear from this three months after you're discharged.

If you're thinking about credit reference agencies, the official receiver does not send them any kind of notice when you're discharged, so you might have to get in touch with the agencies and tell them.

If you have any more questions about bankruptcy, remember your trustee is there for you. Give them a call and they'll be able to answer your questions.

by Sarah Symons

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.