Exemptions

Will bankruptcy remove ALL my debts?

It is important to remember that bankruptcy does not clear all debts. There are several that you may still be liable for, even after you have been formally discharged. These may include:

Child Maintenance

Any monies requested by the Child Support Agency (CSA) for claims of child support, or any other orders made in a domestic or family court will not be covered.

Benefit or Tax Credit Overpayments

If you have received an overpayment in benefits before the bankruptcy order, if there is a decision to seek to recover them after you have been made bankrupt then you will still need to repay the money after you have been formally discharged. If they try to recover the money before the bankruptcy order then the debt can be included in your petition – except in the case of fraud.

Council Tax

You are responsible for paying your council tax for the remaining tax year unless you receive a final demand or liability order.

Secured Debts

If the asset that provided security was sold towards your estate, and did not cover the total amount owed, then the debt is no longer regarded as secured and as such cannot be imposed.

Student Loans

There are two types of Government student loan in the UK – neither can be written off by bankruptcy. The first one is the older ‘mortgage-style’ loan made between Sep 1990 and Aug 1998. These are repaid directly to the SLC (Student Loans Company) by direct debit and have never been covered by bankruptcy. The second type was introduced in 1998, known as income-contingent loans, and are paid through the tax system once the student graduates.

For a short period it was possible to write these loans off due to a loophole in the law, but the hole was quickly closed. These loans will be deducted from you once you reach a certain income status, and will be taken in accordance with the amount you earn. As such, if you file for bankruptcy, you will still be required to pay off any student loans.

Court Fines

You cannot include any court fines for any offences.

Claims Against You

Any debts you may have accrued from personal injury claims being made against you are not permissible.

Fraud

All debts that stem from committing fraud are not covered.

Credit obtained immediately prior bankruptcy

You cannot include any last-minute credit, as it is considered as flagrant disregard for the credit agreement.

Interest

You may be liable for interest on any of the afore mentioned debts.