• You will probably lose all of your assets of any value including your home and cards.

• You can’t get credit for more than £500 without first telling the lender you’re bankrupt.

• You can’t use bank or building society accounts or credit cards.

• You can’t practice as a chartered accountant or lawyer.

• You can’t be a Justice of the Peace (JP).

• You can’t be a member of Parliament.

• You can’t be a member of your local council.

• You can’t act as a company director.

• You can’t form, manage or promote a limited company without the permission of the court.

• You can’t trade in any business under any other name unless you inform all the people affected by each transaction of your bankruptcy.

• You might be publicly questioned in court.

And – most importantly, bankruptcy is not the “quick fix” or “short sharp shock” it is often made out to be:

• A record of your bankruptcy is kept on your credit file for the next six years, which will make getting loans, bank accounts or mortgages difficult and expensive.

• You can sour relationships with business contacts.

• Many people – likely to include some of your family and friends – see bankruptcy as unethical.

• If you’re found to be dishonest, reckless or blameworthy, many of the restrictions imposed by your bankruptcy could, in effect, continue for up to 15 years (read more below).

• You can get relative peace of mind, freed of overwhelming debts to make a fresh start.

• In most circumstances, you will be automatically freed from bankruptcy (what is known as being “discharged”) – after one year.

• An independent person – the official receiver – has a good look into your affairs, so creditors can find out know exactly how bad things look.

• You can petition for your own bankruptcy. If you can’t pay your bills when they fall due, you can petition for your bankruptcy at the High Court if you live or carry on business in London, or in a local county court that deals with bankruptcy – click here to see list of contacts.

• By your creditor/s. A creditor to whom you owe more than £750 (or two or more who are owed between them over £750) can petition for your bankruptcy if they can show that you do not appear able to pay the debt, or have no reasonable prospect of doing so. 

• By the supervisor, or anyone bound by an Individual Voluntary Arrangement, usually just your creditors, can also apply to make you bankrupt.

• You can even be made bankrupt if you refuse to acknowledge the process is underway or refuse to agree to it.

• The best thing to do is co-operate fully once bankruptcy proceedings have begun – ensuring the process is as painless as it can be and that you are well-informed about what is going on. If you need support, the Citizen’s Advice Bureau (CAB) is there to help.

• The court will appoint an official receiver who needs to find out as much as possible about what you own and what you owe.

• In most cases, the official receiver will control all your finances during the application process and then, if you are made bankrupt, after that too.

• The upside is that you are then protected from your creditors, who can only pursue you for money through the receiver.

• But, be warned, the receiver’s job is also to look for any signs of criminal activity, which could have led to your bankruptcy.

• If you owe more than you own, the only things you’ll be allowed to keep are some basic household items and any tools you need in order to work.

• If you own your home, the official receiver can sell it off to go towards paying your debts. If you have a mortgage and can’t meet the payments, the lender may repossess your home. 

• If you have any income over and above what’s necessary to live on, you’ll have to hand that over too for the next year (and possibly for up to three years after your discharge from bankruptcy if an “Income Payments Order” is made against you).

• You might have to pay part of your debts each month, but that will be based on what you can afford. You might like to read more about budgeting to learn about how to cope with these payments.

• Most people are made bankrupt for about a year. You can get out of it if you pay all your debts and all the fees that go with being made bankrupt or if you prove that the bankruptcy order against you shouldn’t have been made (e.g. because you had already paid the debt in question).

• But, if you are found to have been dishonest, reckless or blameworthy, you will be slapped with a Bankruptcy Restriction Order, which has many of the same restrictions of bankruptcy, and can last for up to 15 years.