What is an undischarged bankruptcy?

Bankruptcy is an option considered by many people facing debt. But with so many financial terms to familiarise yourself with, it’s easy to get overwhelmed and panic.

‘Undischarged bankrupt’ is one of those terms you might have come across when researching bankruptcy. It might sound complicated but when you break it down, it’s actually pretty simple.

This article will outline what an undischarged bankruptcy is, how to know if you’re in an undischarged bankruptcy, and what restrictions will be placed on you as an undischarged bankrupt.

What is bankruptcy?

To understand what an undischarged bankruptcy is, it’s important to first understand what bankruptcy is.

Put simply, bankruptcy is a legal process that commences when an individual or business is unable to repay its outstanding debts.

Though it might sound daunting, it can give you a fresh start to improve your financial situation.

The bankruptcy process begins when a creditor files a petition to the court on the grounds that you can’t repay your debts.

Your non-essential assets and excess income are then used to repay a portion of the unpaid debt.

Most bankruptcies are discharged after 12 months, at which point all debts included in the bankruptcy are cleared.

However, like most debt solutions, your bankruptcy will stay on your credit report for six years after it has been discharged.

The Insolvency Rules (2016) sets out the rules creditors must stick to when issuing bankruptcy orders.

What does ‘undischarged bankruptcy’ mean?

Being discharged from bankruptcy means the bankruptcy is no longer in progress. So ‘undischarged bankruptcy’ simply means an ongoing bankruptcy that is still in progress.

As an undischarged bankrupt, you’re still subject to the terms of your agreement under the Bankruptcy and Insolvency Act.

This includes any payments or restrictions that were included in your bankruptcy agreement.

How do I know if I’m in an undischarged bankruptcy?

The easiest way to know if you’re an undischarged bankrupt is if payments are still being made towards your bankruptcy each month.

Because the average bankruptcy period lasts 12 months, you will usually be expected to continue making pre-agreed payments until the first anniversary of your bankruptcy order when you were officially declared bankrupt.

Another way to tell if you’re an undischarged bankrupt is if certain restrictions are still placed on your finances.

For example, if you’re an undischarged bankrupt, you will be limited in what you can and can’t spend money on, which assets you can keep, and which assets must be sold to repay your outstanding debts.

Can my bankruptcy discharge be delayed?

Although most bankruptcies last 12 months, they can be delayed for a number of reasons. This is known as a ‘delayed discharge’.

Once the bankruptcy process has begun, an Official Receiver (OR) from the Insolvency Service will take control and manage your assets.

If, for whatever reason, you fail to comply with their terms, they might write to the court asking them to cancel your bankruptcy discharge. This is known as a ‘suspension of discharge’ and can result in your bankruptcy lasting longer than 12 months.

The court will then contact you and let you know if there is anything you need to do to be granted a discharge from your bankruptcy.

Will I be told when I’m discharged from my bankruptcy?

Although some debt solutions will inform you when your term comes to an end, bankruptcy is an automatic process and usually just quietly ends after 12 months.

The only way you’ll be contacted is if your discharge is being delayed.

However, this can make it difficult to prove to banks and lenders that you have been discharged from your bankruptcy when you apply for a mortgage or credit down the line.

The Insolvency Service can send you free confirmation if you request it but most banks ask for an official Certificate of Discharge which can only be obtained through the court for a fee of £70.

Keeping a note of the date your bankruptcy order was imposed can help you know when your 12-month period is coming to an end.

Can I still be chased for my debts after I’m discharged from my bankruptcy?

Once you have been discharged from your bankruptcy, all the debts included in your bankruptcy will be cancelled. This means you no longer owe money.

However, because bankruptcy doesn’t cover all debts, you will still be required to pay some debts after you’ve been discharged.

Some debts, such as benefit repayments, might also be paused while you’re bankrupt but restarted after your term comes to an end.

The debts you’ll still be liable for after being discharged from your bankruptcy include:

  • Debts gained through fraud
  • Maintenance settlements
  • Personal injury damages owed
  • Student loans
  • Court fines
  • Debts accrued after the bankruptcy order was made

What restrictions will be placed on me as an undischarged bankrupt?

Once a bankruptcy order is made against you, certain restrictions will be put in place to protect your finances.

Some of the restrictions put in place include:


If you live in England, Scotland, or Wales, there is nothing stopping you from travelling during your bankruptcy as long as it doesn’t impact your ability to make your monthly payments.

There is also no need to inform your OR that you intend to travel unless you plan to be gone for an extended period of time.

However, if you live in Northern Ireland, you must contact your OR and obtain permission from the court for a ‘leave of the court’.


Understandably, there will be a limit on the amount of money you can borrow during your bankruptcy and you won’t be able to borrow more than £500 without informing the lender that you’re bankrupt.

Your bankruptcy will also be listed on your credit file for six years after the date you were discharged.

This will lower your credit rating and make it difficult to borrow money or get a mortgage during this time.


There are also some restrictions when it comes to employment. For example, undischarged bankrupts are prohibited from acting as a director of a business until their term comes to an end.

Some industries, such as finance and accounting, also require discharged bankrupts to declare they have been bankrupt in the past.

This can impact their employment opportunities and, in extreme cases, they might be asked to seek employment elsewhere.

<strong>Maxine McCreadie</strong>

Maxine McCreadie

Maxine is an experienced writer, specialising in personal insolvency. With a wealth of experience in the finance industry, she has written extensively on the subject of Individual Voluntary Arrangements, Protected Trust Deed's, and various other debt solutions.