Wondering what debts are included in bankruptcy and which debts will be cleared in bankruptcy? When going bankrupt you will have to declare all your debts on the form. If you forget to list all debts in your application, you can let the Official Receiver (OR) or trustee know as soon as possible.
What debts are included in bankruptcy?
Debts included in bankruptcy will be written off after bankruptcy. Most unsecured debts that you have in your name will be included. These could include:
- Gambling Debts
- Store Cards
- Catalogue Debts
- Council Tax Arrears
- Credit Cards
- Utility Arrears
- HMRC Debts (personal to you)
- Benefit Overpayments (unless fraudulent)
You can not leave any unsecured debt out of your bankruptcy application.
Which debts are not included in bankruptcy?
It is important to note that not all debts are written off in bankruptcy. These will still need to be repaid. Any secured debt provided the item is not surrendered would normally be excluded in bankruptcy. Here is a list of debts not included in bankruptcy:
- Social Fund Loans
- Court Fines
- Child Maintenance Arrears
- Student Loans
- TV Licence Arrears
- Debts incurred through fraud
- Mortgages (If you want to keep your property)
Are joint debts included in bankruptcy?
If any of your debts are in joint names, the debt will fall on the person who isn’t bankrupt. These debts will not be written off, but you will have to pay them. Therefore it is important to think carefully about how going bankrupt will affect the other person. For more information, please read our article on who is liable for my debt.
Pensions and bankruptcy – Can the official receiver take my pension?
Since the bankruptcy laws were changed on May 29 2000, pensions have been excluded from bankruptcy. But there are few watchwords.
The pension must be approved by HM Revenue and Customs (HMRC). If it is not then, you can ask the court to exclude it from your estate. But if you cannot ring-fence the fund with an exclusion order creditors can seek repayments both from the lump sum and any monthly payments you make.
If your pension is due whilst you are bankrupt any money you receive will count as income and the OR can order it to be used to pay back debts. So during the three years following your bankruptcy, if the income you get from your pension exceeds what your basic living expenses should be there is a surplus and this is fair game to your trustee.