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Bankrupts, Spouses and Partners

Bankruptcy, or the threat of bankruptcy, whether by application to the adjudicator, or via a third party’s statutory demand or bankruptcy petition, can be a worrying prospect, raising a number of questions. Will I lose my home? Will my debts be wiped out? How long will it last? Will it affect my family? Can the bankruptcy be cancelled or ended early? What are my obligations and duties? Will I be affected by my partner’s bankruptcy?

Isadore Goldman are specialists with a long pedigree of providing personal insolvency advice. If you, your spouse, partner or a family member are bankrupt, or about to be made bankrupt, and need advice, speak to us as soon as possible. We can advise on:

Our team understand how overwhelming and stressful it can be to face mounting debt issues, whether your debts are personal, or relate to a sole trader or partnership business. We appreciate it can be hard to know what the best course of action is, especially when it comes to deciding whether to proceed with bankruptcy, where this is decision in your hands.

We will make sure you are fully aware of all your options, including whether you have any alternatives to bankruptcy, such as an Individual Voluntary Arrangement (‘IVA’), that may suit your circumstances better.

We can also assist where the process is in the hands of a third party, for example, if someone has issued a bankruptcy petition against you that you wish to contest.

Ready to speak to our bankruptcy lawyers?

You can contact your local Isadore Goldman office in London, Norwich or Portsmouth, or email

If you are an Insolvency Practitioner or a creditor/lender looking for advice, we can also advise you. Visit our Insolvency Practitioners page or our Lender and Creditor Services page for more information.

Why choose our expert bankruptcy solicitors for advice?

Independently recognised expertise

Our legal experts are highly esteemed for their services in this area, with consistent recommendations in the prestigious client guides, Chambers & Partners and the Legal 500.

A friendly, personal service

Everyone seems to have something to say about the best way to tackle debt, so knowing whose advice to follow can be hard. The benefit of hiring a specialist solicitor, is that you can trust they have the right experience to help you.

Being a dedicated insolvency firm, we have years of experience dealing with these types of cases. As well as advising bankrupts and their spouses and partners, we also advise creditors and insolvency practitioners. This means we understand scenarios from all perspectives, enabling us to help debtors negotiate in ways the relevant stakeholders are likely to respond to.

But, when we act for you, we act only for you. Finding the best resolution for you, whatever the circumstances, will be our greatest priority.

Clear, practical advice about your options

We will make sure that you are fully informed about all of your options, so you can proceed with confidence. Bankruptcy is big step, but if it is the right option for you, we will make sure you understand why, and help you with every stage of the process.

What is bankruptcy?

Bankruptcy is a process applicable only to individual debtors, intended to:

  • provide them with a fresh start, and
  • ensure their creditors (the people owed money) are repaid equally from the available assets.

To facilitate this process, when a person is made bankrupt, they must hand over all of their non-essential assets to their trustee in bankruptcy (the ‘Trustee’), the individual appointed to manage the bankruptcy. The Trustee is responsible for realising the bankrupt’s assets and paying their creditors. If a bankrupt co-operates with their Trustee, they will normally be discharged from bankruptcy and free of its restrictions after a year.

The parties typically involved in a bankruptcy are:

  • The bankrupt
  • Their partner/spouse
  • The bankrupt’s creditors
  • The Trustee

Our bankruptcy solicitors regularly act for all these parties, meaning we have a deep understanding of their concerns and perspectives . As such, whether you are bankrupt, or a bankrupt’s spouse or partner, we are ideally placed to fight your corner.

If you cannot pay your debts as they fall due, you can apply for your own bankruptcy. This application is made to an office known as the adjudicator, rather than the Court. We have experience dealing with this process, and can help you navigate the issues that might arise on such an application.

A bankrupt's duties

If you have been made bankrupt, you may be wondering what you can and cannot do, and how this may affect you on a day to day basis. You may also be unsure of what duties you owe to your Trustee. It is important to secure advice at an early stage, so as to avoid the harsh consequences that can follow from non-cooperation.

Subject to your full cooperation with your Trustee, you will usually receive your discharge from bankruptcy after one year. Until that time, you are subject to a number of restrictions, including those mentioned below.

You may have trouble borrowing money

Whilst bankrupt, you cannot borrow more than £500 without telling the lender about your bankruptcy. This can be a double-edged sword, because telling the lender may make them reluctant to lend to you.

You cannot run a company

Whilst you are an undischarged bankrupt, you cannot be involved with the management of any company. This means that you cannot:

  • Act as a company director, without permission of the court
  • Create, manage or promote a company, without permission of the court
  • Manage a business with a different name, without telling the people you do business with that you are bankrupt

If you are unsure about any of these restrictions and how they may apply to you, please contact us.

Criminal and financial consequences can follow both for you as a bankrupt and anyone who assists you in breaking the rules. For example, if you act as a director of a company whilst you are an undischarged bankrupt, and somebody assists you with that, the person assisting you can be made liable for the debts of the company.

What happens if you break the bankruptcy rules?

Bankruptcy restrictions, including those mentioned above, will usually last for one year, until your bankruptcy is discharged. However, if you fail to cooperate with your Trustee, the Trustee or the Official Receiver can apply for a Bankruptcy Restrictions Order, which extends the restrictions, for a specified period. Alternatively, the court can suspend your discharge from bankruptcy (meaning you will be subject to bankruptcy restrictions for longer).

For this reason, it is important that you are aware of the duties and responsibilities you owe to your Trustee, in particular with regard to the information you must provide them, to assist them in managing your bankruptcy estate.

If you are unaware of your duties, and fail to adhere to them, your Trustee or the Official Receiver may interpret this as wilful non-compliance, which can lead to costs penalties, further restrictions and sometimes even criminal liability.

If you are unsure about your position, contact us for an initial consultation. Whilst you will always be our top priority, it may be the case that advice is best given, at least initially, or associate. Whoever we advise, you can be assured that we will protect your interests and guide you through the bankruptcy process.

Alternatives to bankruptcy

If you are already bankrupt, or facing the threat of bankruptcy, there may be other options available. For example, you may be eligible for a Debt Relief Order (‘DRO’) or an Individual Voluntary Arrangement (‘IVA’). It may even be the case that you have a complete defence in respect of the debt claimed from you. We regularly advise individuals facing financial difficulties and can recommend the best option available to you, according to your circumstances.

Debt relief orders

A DRO is a simplified, quicker and cheaper alternative to bankruptcy, suitable for debtors owing £30,000 or less and with few or no assets and little disposable income.


Individual Voluntary Arrangements

An IVA is a formal agreement between you and your creditors, monitored by a third party called a Supervisor, who is usually an insolvency practitioner.

An IVA can provide considerably more flexibility than is available in a bankruptcy, depending on the terms agreed with the creditors.

We have considerable experience advising on IVAs and will always strive to achieve the best and most cost-effective solution to your circumstances. We can also advise if you have been unable to comply with the terms of an IVA, or are at odds with your Supervisor.


Debt Respite Scheme (Breathing Space)

On 4 May 2021, a new Debt Respite Scheme (Breathing Space) came into force, offering people with problem debt the right to legal protection from creditor action. There are two types of breathing space – standard, and mental health crisis. The standard breathing space, which is available to anyone with problem debt, affords 60 days protection from any action by creditors. The mental health crisis breathing space offers enhanced protection but is only available to individuals receiving mental health crisis treatment.

You must engage a debt advice provider to start a breathing space, and we can help guide you through this process.

Informal agreement with your creditors

You can seek to reach an informal agreement with your creditors, with a view to avoiding bankruptcy or a formal insolvency process altogether. We can advise upon and assist with negotiations with your creditors.

The decision as to the way forward is ultimately yours, but after speaking to one of our team, you will be able to make an informed choice.

Partners or spouses

Often the partner or spouse of a bankrupt is the innocent victim in what follows. They may even be unaware that a bankruptcy order has been made, but nevertheless get drawn into a world where all the cards seem to be held by their partner’s Trustee in Bankruptcy.

If you are the spouse or partner of a bankrupt, specialist advice is essential, and the earlier you seek help, the better. Our bankruptcy lawyers can advise you on your rights and obligations, and help steer a course through the choppy waters of your partner’s bankruptcy, including in any negotiations with their Trustee.

Whilst early action is always a good investment, all is not lost if you seek advice at a later date. Whatever the stage of the proceedings, we will strive to protect your interests.

Annulment applications

If you are already bankrupt, you may be able to cancel (annul) your bankruptcy, with an application to court. This may be possible if:

  • You believe that the bankruptcy order should not have been made, or
  • You or a family member or friend has sufficient funds to pay off your bankruptcy debts in full.

We have streamlined methods of dealing with these applications and will be able to offer you highly competitive rates. We can advise you on the merits of your case and the best strategy to adopt.

Annulment applications can be complex, so it is best to seek advice as soon as possible after the bankruptcy order has been made.

If you or a third party are able to pay off your debts in full, you will need to act quickly. The earlier an application is made, the better.

Ready to speak to our bankruptcy lawyers?

Contact your local Isadore Goldman office in London, Norwich or Portsmouth.