What is an undischarged bankrupt?

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This article will explain what an undischarged bankruptcy is, how long a typical bankruptcy lasts, and what restrictions you’ll be placed under while you’re an undischarged bankrupt.

Bankruptcy is a legal process designed to help individuals and businesses deal with debts they can’t pay. But while it can allow you to start afresh with your finances, some words and phrases can make the process seem much more complicated than it is.

The term ‘undischarged bankruptcy’ may sound daunting but it’s simply the legal name given to an ongoing bankruptcy that hasn’t been discharged yet or, in other words, a bankruptcy that’s still in progress.

What is bankruptcy?

Bankruptcy is a legal status applied to individuals and businesses that are insolvent and unable to pay their debts. Due to the serious and long-term implications of bankruptcy, it is usually only considered as a last resort after all other debt solutions have been ruled out.

When you enter bankruptcy, you’ll agree to liquidate your assets and make drastic changes to your usual spending habits for a period of 12 months. During this time, your non-essential assets and excess income may be used to pay your creditors, but this depends on your financial situation. For example, if your only income is benefits or you have no savings, you don’t have to make any payments.

Once you’ve been discharged from bankruptcy, any remaining debts will be written off and you’ll be free to make a fresh start with your finances. Depending on your level of disposable income, you may need to continue making payments for up to another three years.

How long does a bankruptcy typically last?

Most bankruptcies last 12 months, after which time your remaining debts will be cleared and you’ll be free to make a fresh start with your finances.

However, there are some situations in which you won’t be discharged from your bankruptcy after 12 months – known as a ‘delayed discharge’ or ‘suspension of discharge’. This can happen for a number of reasons but usually happens if you refuse to cooperate with the individual handling your bankruptcy (trustee) or are found to have been dishonest.

The chances of you receiving a delayed or suspended discharge are rare, but if you find yourself in this position, you will always be told why it has happened and the steps you must follow to ensure you are eventually discharged.

How does the bankruptcy process work?

The bankruptcy process can differ slightly from person to person but usually follows the same set of steps. Here is a rough guide to what you can expect when you file for bankruptcy:

Seek expert debt advice

Before applying for bankruptcy, you must seek expert debt advice to ensure it’s the right solution for your financial situation at this time. Bankruptcy can impact many areas of your life, including your family, home, and job, and is not a decision that should be made lightly.

Even if you’ve done your research and are confident you want to file for bankruptcy, an expert will be able to talk you through your options and inform you of the debt solution they believe is best suited to your unique circumstances.

Apply for bankruptcy

The next step in the bankruptcy process is applying for bankruptcy. This can only be done by creating an account on the GOV.UK website and completing an application form, which will ask for details of your current finances and costs £680 to submit.

There is no offline equivalent to applying for bankruptcy and the process can’t be completed at a local court, but if you don’t have an email address, you can request that your ID number be sent to you by post.

Wait for the adjudicator’s decision

Once you’ve submitted your application form, you must wait for the adjudicator to assess your application. They will have 28 days to make a decision, but you’ll usually receive a response before this.

Sometimes, an adjudicator will contact you because they require more information about you or your financial situation. When this happens, they’ll be given an extra 14 days to make a decision.

The bankruptcy order is made

When you’re declared bankrupt, a bankruptcy order will be made and a trustee will be assigned to manage your assets and estate for the next 12 months. They will notify your creditors that you are bankrupt and may invite you to attend an interview to discuss your financial situation in more detail.

Failure to cooperate with your trustee or attend an interview when requested could lead to further court action and, in some cases, your bankruptcy could be extended beyond the standard 12-month term.

Discharge from bankruptcy

The final step in the bankruptcy process is being automatically discharged. This usually happens 12 months after the date your bankruptcy order was made but can take longer if you didn’t cooperate with your trustee or were dishonest about your financial situation.

Once discharged, your unsecured debt will be cleared and you’ll be free to make a fresh start with your finances – even if no payment or attempt at payment was made for the duration of your bankruptcy.

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What is an undischarged bankruptcy?

The term ‘undischarged bankruptcy’ simply refers to a bankruptcy that’s still in progress and hasn’t been discharged yet. During this time, you’ll still be subject to certain restrictions and your trustee will remain in control of your assets and estate.

Furthermore, if you’re an undischarged bankrupt, you won’t be able to borrow more than £500 without declaring that you’re bankrupt and you’ll be automatically disqualified from acting as the director or manager of a company.

Before you apply for bankruptcy, it’s important you understand the different rules and restrictions you’ll be placed under for the next 12 months. Even if you don’t have any major life events planned in the next year, it’s important to remember that your bankruptcy will be visible on your credit record for a minimum of six years.

What restrictions will I be placed under as an undischarged bankrupt?

There are certain rules you’ll be expected to follow as an undischarged bankrupt. Here are some of the main restrictions you can expect when you apply for bankruptcy:


When you’re an in active bankruptcy, you won’t be able to borrow more than £500 without informing the lender that you’re bankrupt. This can make it difficult to access most forms of credit, such as a loan, mortgage, phone contract, or bank account.

The bankruptcy will also remain on your credit record for another five years after you’ve been discharged (six in total). So if you’re planning to buy a home, get married, or start a family in the next few years, being bankrupt may prevent you from doing so.


As previously mentioned, you’ll be automatically disqualified from working in a number of senior management or finance-related roles while you’re in an active bankruptcy.

Even after you’ve been discharged, you may find it difficult to work in certain professions, such as accountancy, insolvency, and law, as these jobs usually require you to disclose your recent financial history.

Though rare, if you’re found to have been dishonest about your financial situation or your contract includes a bankruptcy clause, you may also be asked to leave your current profession or find alternative employment with a different company.


There is nothing stopping you from travelling during active bankruptcy proceedings as long as it doesn’t affect your ability to make payments as agreed or stick to the restrictions you’ve been placed under.

However, this guidance only applies to those living in England, Scotland, and Wales and if you live in Northern Ireland, you’ll need to seek permission from the court before you can leave the country. This is known as a ‘leave of the court’ which essentially means ‘permission of the court’.

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What happens once I’ve been discharged from bankruptcy?

Most bankruptcies are automatically discharged after 12 months but you won’t always be notified so it’s important to know what to expect once your bankruptcy period comes to an end.

Once the court has discharged your bankruptcy, your unsecured debts will be cleared and you’ll be free to make a fresh start with your finances. This means that creditors won’t be able to contact you or take legal action against any of the debts included in the bankruptcy.

However, while you’ll be freed from the bankruptcy restrictions placed on you for the past 12 months, your bankruptcy will remain on your credit file for another five years and this can make it difficult to access various forms of credit.

Remember, having a bankruptcy on your credit file will lower your credit rating but there are steps you can take to start rebuilding your credit score as soon as you receive your bankruptcy discharge. This can allow you to gradually get your finances back on track and improve your creditworthiness in the eyes of a lender.

How can I prove I’ve been discharged from bankruptcy?

Once you’ve been discharged from bankruptcy, you may be wondering if there’s any way you can prove your arrangement has ended. Thankfully, the answer is yes.

The easiest way to prove your bankruptcy has ended is to email the Insolvency Service at [email protected] and ask for a ‘confirmation letter’. This will give you general proof of discharge but if you want to apply for a mortgage, you’ll need something a bit more specific.

Before you can apply for a mortgage, you’ll need something called a ‘certificate of discharge’. This is a document confirming the date your bankruptcy started and can also be obtained from the Insolvency Service by emailing [email protected].

This can be useful when dealing with future lenders and financial institutions as it proves you have successfully stuck to the terms of your bankruptcy order for 12 months and are no longer in debt to your creditors.

There is a solution for you


The term ‘undischarged bankrupt’ can sound daunting if you’ve just recently started your bankruptcy proceedings, but it’s essentially just another way of describing an ongoing bankruptcy that hasn’t been discharged by the court.

When you’re in an undischarged bankruptcy, you’ll be placed under certain restrictions, including not being able to borrow more than £500 without informing the lender that you’re bankrupt and not being able to work in certain senior management or financial roles.

Once you’ve been discharged, your remaining debts will be cleared and you’ll be free to move on with your life. Depending on your financial situation, you may be asked to continue making payments for up to three years.

Key Takeaways

Bankruptcy is a legal procedure governed by the Insolvency Act (1986) that can give you some much-needed relief from your unaffordable debts if you're facing financial difficulties
Most bankruptcies last 12 months but this can be extended if you don't cooperate with your bankruptcy trustee or are found to have been dishonest
Being an undischarged bankrupt simply means you're in an active bankruptcy that you haven't been discharged from yet
During an undischarged bankruptcy, you'll be subject to certain restrictions when it comes to credit, employment, and travel
Once you've been discharged from your bankruptcy, you're advised to seek professional advice, rebuild your credit score, and apply for a confirmation letter
Maxine McCreadie

Maxine McCreadie

Author/Debt Expert

Maxine McCreadie, prominent personal finance writer featured in Vogue and Yahoo News, delivers practical guidance, simplifying money management and championing financial literacy.

How we reviewed this article:


Our debt experts continually monitor the personal finance and debt industry, and we update our articles when new information becomes available.

Current Version

February 28 2024

Written by
Maxine McCreadie

Edited by
Ben McCormack

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