What Debts Can’t Be Written Off By Bankruptcy?

Declaring bankruptcy is a common way to reorganise personal finances, clear large debts and have the opportunity for a fresh financial start.

However, anyone looking at going bankrupt to clear debt in the UK needs to understand that not all debts will simply be written off.

In this article, the team at Irwin Insolvency explains which debts can and cannot be written off by bankruptcy.

Will My Debts Be Written Off If I Go Bankrupt?

Declaring bankruptcy is a way to wipe out large debts. However, this only happens at the end of your 12-month bankruptcy order.

When you are subject to a bankruptcy order, the official receiver overseeing your case will take control of your bank accounts and finances. During this time, you may have to pay a certain percentage of your income to your creditors.

If you have any large assets, such as a house or expensive car, the official receiver can sell these and use the money to pay off your debts. If you have debts remaining after this, these will often be written off at the end of the bankruptcy period.

Does Going Bankrupt Clear All Debts?

If you’re going bankrupt to clear debt in the UK, it’s important to know which debts can and can’t be wiped out.

Bankruptcy will often wipe out large debts, such as bank loans or credit card bills. However, there are certain personal debts that are not affected. You may need to continue paying certain debts after you’ve been discharged.

You also need to remember that your debts may be cleared, but at the cost of your assets. If you owe large sums of money and have few assets however, bankruptcy is often an excellent option.

Debts Included in Bankruptcy

The following debts will commonly be cleared at the end of your 12-month bankruptcy period:

  • Bank loans
  • Bank overdrafts
  • Credit card bills
  • Utility debts
  • Rental debts
  • Hire purchase payments
  • Self-employment business debts

While many debts are wiped out, including rent and credit card bills, you could be evicted by your landlord, have your business closed down, and may struggle to secure credit and loans in the future.

Debts Not Written Off by Bankruptcy

There are also a number of debts that cannot be cleared by declaring bankruptcy. If you continue to have a substantial income, you might be required to continue paying your creditors even after the 12-month bankruptcy period has ended.

There are certain personal debts that are never wiped out, including:

  • Student loan repayments
  • Maintenance payments for child support
  • Court-ordered payments
  • Fines

Contact Irwin Insolvency for More Information on Going Bankrupt to Clear Debt in the UK

If you need assistance going bankrupt to clear debt in the UK, the team at Irwin Insolvency is here to help.

Our expert insolvency practitioners have the skills and experience to help you understand if bankruptcy is right for you and which debts can and can’t be written off.

Contact Irwin Insolvency today for your free consultation.

Contact Irwin Insolvency today for your free consultation

Call us
0800 254 5122

About the author

Gerald Irwin

Gerald Irwin is founder and director of Sutton Coldfield-based licensed insolvency practitioners and business advisers, Irwin Insolvency. He specialises in corporate recovery, insolvency,
 rescue and turnaround.