What happens after discharge from bankruptcy?

When do you get discharged and why may this be suspended?

Almost everyone is discharged 12 months after the date they went bankrupt.

During these 12 months when you are bankrupt, you have to co-operate with the Official Receiver (OR) and give information when asked to do so.

If you don’t co-operate, the OR may ask the court to suspend your discharge, so you won’t be discharged at the end of the 12 months.

This is very rare and you will know if this happens, it isn’t done in secret.

This isn’t something you should worry about.  The OR doesn’t expect you to have a perfect memory or receipts for everything bought over the last five years. “Not co-operating” means refusing to answer questions or concealing things.

If your discharge from bankruptcy is suspended, you will be told by the court whether you have to do anything in order to get your discharge.

Discharge day – nothing happens!

You may have had the day ringed in your diary for months, but nothing visibly happens when you are discharged! You don’t get a certificate or even an email from the OR.

If you haven’t heard anything from the OR about your discharge being suspended you can safely assume that you have been discharged.

Getting confirmation that you have been discharged

You can ask for a confirmation letter that you have been discharged from the Insolvency Service by emailing them at discharge.queries@insolvency.gov.uk – this is free.

Some lenders, especially mortgage lenders, will want to see a Certificate of Discharge. How you get this depends on how you went bankrupt.

If you applied for bankruptcy online after April 2016, you can email the Insolvency Service and ask for a Certificate of Discharge. This is free.

If you went bankrupt before April 2016 or if you were made bankruptcy by a creditor you should complete form LOC013 and send it with a cheque payable to ‘HM Courts and Tribunals Service’ to the court that made you bankrupt. It costs £70 for three copies of your Certificate of Discharge and £10 for additional extra copies.

What happens when you are discharged

When you are discharged you are released from your debts (except for any such as student loans which couldn’t form part of your bankruptcy .)

Your bankruptcy ends, you are no longer bankrupt!

After discharge, you don’t have to tell the OR about assets or money that you receive, unless you were already entitled to these before your discharge.

The events you no longer have to tell the OR about include:

  • receiving redundancy money;
  • getting an inheritance (unless the person died before you were discharged, see Inheriting money when bankrupt); and
  • a pension lump sum or money you withdraw from a pension.

There is a small exception here if you are paying an IPA/IPO. 

Personal possessions – normally safe!

Most people do not lose any personal possessions when they go bankrupt. 

Most assets apart from your home that have to be sold are dealt with within the twelve month bankruptcy period.

In the unusual situation that you have assets that the OR has told you within the 12 months that may have to be sold, this still applies after discharge.

If you have not heard anything from the OR by the time you are discharged, that is the end. You will not be asked anything afterwards and nothing can be taken.

Family home

There’s a 3-year time limit for the OR to start legal action to sell the family home. If your share of the equity (or your “beneficial interest”) is less than £1,000 three years after you went bankrupt, no action will be taken, the interest will return to you and the restriction at Land Registry will be removed.

“The right to something” may be an asset that now belongs to the OR

Sometimes you have a legal right to do something, for example make an insurance claim, ask for a refund, sue someone.

If you had this legal right before you went bankrupt, this right is an asset that transferred to the OR when you went bankrupt. It does not transfer back to you when you are discharged,

This may include any ongoing complaints and court cases, and also ones which have not yet been started.

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