What does it mean to be an undischarged bankrupt? 

This article has been written to explain undischarged bankruptcy and answer the most asked questions to do with discharges and undischarged bankruptcy.

Whether you are considering bankruptcy to escape your debts, already have your bankruptcy order or are close to discharge, this page has the details you’re going to want to know. And always visit a registered charity website for free debt help, tools and advice!

What is bankruptcy?

Bankruptcy is an insolvency option for people who owe significant debts that they are unlikely to pay back in a reasonable time. It can be used if you have lots of debts or even if you have one large debt that is not manageable. 

Note that alternative options exist, such as a DRO or IVA!

The debtor can apply for bankruptcy to an Official Receiver at the Insolvency Office or get a debt management company to assist. If successful, the individual’s money and assets will be eventually taken by a trustee and distributed among creditors to pay back as much of their debts as possible. 

If you owe money that you have the means to pay back but refuse to do so, the company you are in debt with could try to make you bankrupt; this is involuntary bankruptcy

The bankruptcy process includes different stages, but the end goal is to cancel debts and give the debtor a fresh start. If you are confused about the process, Citizens Advice can walk you through it. Or you can read more about it on our blog, right here!

What happens when you are discharged from bankruptcy?

When you are discharged from your bankruptcy, you are no longer responsible for any debts. If you have been making monthly payments from any wages via an Income Payments Agreement (IPA), you can be asked to carry on making these payments from your income for up to three years after discharge. 

If you refuse these payments, you can be ordered to make them by a court of law. 

How long does a bankruptcy take to discharge?

You will be discharged from bankruptcy if you keep to all the restrictions placed on you 12 months after the date it began. 

Three months after being discharged from bankruptcy, it will be deleted from the Insolvency Register, which is a register that records all bankruptcies. 

However, your bankruptcy will be recorded on your credit file for six years from the date it started – and only then is it automatically deleted. 

How to get proof you’ve been discharged

You won’t automatically receive a letter that you have been discharged from bankruptcy. But you can contact the Official Receiver and ask for a free letter stating that you have been discharged from your bankruptcy. You can access this service by emailing:

discharge.queries@insolvency.gov.uk

If you want to apply for a mortgage in the future, you will need to get a Certificate of Discharge costing £70 for an initial copy. There is a £10 fee for each copy thereafter. If you applied for bankruptcy using the online service, you can use the email address above. If not, you need to contact the court. 

What is an undischarged bankruptcy?

An undischarged bankruptcy is when your bankruptcy is still ongoing. In this situation, you are known as an “undischarged bankrupt” and you will have to continue to abide by any restrictions placed on you. You will still be required to make monthly payments during this stage as well.

In simple terms, if you have an undischarged bankruptcy, you are not yet free from your debts.  

How long are you an undischarged bankrupt?

Most people are an undischarged bankrupt for the standard 12 month period and are then discharged. 

This happens in most cases – but not all.

Some remain undischarged for longer, usually because they did not comply with the restrictions placed on them by the Official Receiver. The Official Receiver will ask the court for a delayed discharge, also known as Suspension of Discharge. 

The court can then issue a Bankruptcy Restriction Order (BRO) for a period between two and 15 years. This is quite rare and is only used when the debtor has been involved in fraudulent or reckless behaviour. 

Can an undischarged bankrupt borrow money?

If you have an undischarged bankruptcy, the law states you cannot borrow more money. This is for your own financial protection. 

Once you have been discharged, there are no legal limits on how much credit you can apply for. However, it will be extremely difficult for any person with a recent bankruptcy on their credit file to manage to convince creditors to lend them money. They will search your file before offering you a loan or credit card. 

If you want to search your own credit history, you can do so for free online using the website of a credit reference agency. There may be a fee if you don’t cancel a free trial. 

Can undischarged bankrupts leave the country?

Undischarged bankrupts in England, Wales and Scotland can leave the country as long as it does not affect their ability to meet any repayments. But if you have an undischarged bankruptcy in Northern Ireland, you need to submit a special request to go abroad called a Leave of the Court. 

You can ask for a Leave of the Court by contacting your Official Receiver. If you get this permission, there are additional conditions, such as informing the Official Receiver of your overseas address every two weeks (if applicable). 

Can an undischarged bankrupt be a company director?

If your bankruptcy has not been discharged, you cannot become a company director – and you cannot manage or promote a limited company business. You may be able to apply to the court for an exemption. 

You can begin your own business or side hustle later. Although you may not get any business loans to support you. 

Other bankruptcy process FAQs

Will bankruptcy make me lose my home?

If you own property, it may be sold by the Official Receiver and used to pay off your creditors. However, a partner or family member may be able to buy out your share of the home. The home cannot be sold and should be returned to you if it does not sell within three years. 

You can remain in a rented home if your rental agreement allows bankrupt tenants. If you have debts to your landlord, they could start to repossess the property from you. 

Can I keep my car after bankruptcy?

In the majority of situations, you will not be able to keep vehicle assets during bankruptcy. You may be able to if you rely on your car due to a disability or need it for employment with no public transport alternatives. 

Will my student loan be wiped after bankruptcy?

After being discharged from bankruptcy, you will still be responsible for paying back student loanxf debts. Some other debts are not wiped by bankruptcy, such as family court proceedings debts, parking fines and Magistrate fines.

What is a trustee during bankruptcy?

The Official Receiver may appoint a trustee to arrange and share out your money and assets between creditors. The trustee is a professional insolvency practitioner. The Official Receiver may act as the trustee in some cases. 

Are you an undischarged bankrupt?

We’ve covered the key details of undischarged bankruptcy and answered the most common questions. 
For further advice and support, reach out to a registered charity or read our other blog posts. Our website is packed with answers to common bankruptcy queries.

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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