Bankrupts will lose most of their assets and access to credit for at least a year. Their home may be sold (depending on the amount of equity). Furthermore, during the bankruptcy period, they will face certain restrictions including not being allowed to:
- Borrow more than £500 without informing the lender of their bankruptcy status. In Scotland, they cannot borrow more than £2,000 without informing the lender of their bankruptcy status.
- Act as a director of a company (unless the court gives permission).
- Create, manage or promote a company (unless the court gives permission).
- Manage a business with a different name (unless they inform anyone they do business with that they are bankrupt).
- Work as an insolvency practitioner.
- In Scotland, they cannot act as a Member of Parliament, as a member of any local council, a Justice of the Peace or a member of a school board.
Although most debts will be written off once the bankruptcy has been discharged, monthly payments required as part of an Income Payments Agreement may need to be made for up to three years following bankruptcy (pension payments may be taken into account).
In Scotland, if you are assessed as having enough money, you will have to pay contributions towards your debt for four years.
Further, in Scotland, if you obtain new property or money within four years of declaring bankruptcy, it may be claimed by the bankruptcy trustee.