Home Insurance for Those Previously Declared Bankrupt

If you are in debt then you can apply to become bankrupt, which may be a worthwhile course of action if you have no money to repay your creditors or if repayment will take you years to complete.

worrying about debts

How bankruptcy will affect your home insurance

If you owe someone money, they can also apply to have you made bankrupt (whether you like it or not). Bankruptcy is an order issued by a court, whereby an Official Receiver is appointed to assume control over your assets and handle your creditors on your behalf.  A first time bankrupt will usually have discharged their order after one year from the date it was issued, at which point any outstanding debts are usually written off, to provide a fresh start with some restrictions.

Advantages of bankruptcy

Bankruptcy can be advantageous in that it relieves the pressure that creditors might apply, it also forces creditors to cease legal proceedings over any outstanding debts, though it does not necessarily prevent bailiffs from retrieving property. You are allowed to keep certain things, such as household goods and reasonable living expenses. The freedom to make a fresh start and the possibility of having owed money written off can be invaluable.

Disadvantages of bankruptcy

There are a number of disadvantages associated with going bankrupt, the first being that it costs a minimum of £600 to obtain a bankruptcy order, or more if you use a solicitor. Whilst in bankruptcy you are ineligible for more credit, you may be required to sell your own home or your personal possessions. Some professions may have rules that prevent bankrupts from continuing in employment, so you may lose your income. Any businesses that you own are likely to be liquidated and your employees dismissed.

Bankruptcy cannot be kept private and will be listed publicly. It may affect your immigration status. If you do not co-operate with the Official Receiver, or you took on debts knowing that you would not be able to repay them, then a bankruptcy restriction order could be taken out against you. A restriction order can last for 15 years and will severely restrict your financial dealings. Court fines and student loans will never be written off through bankruptcy.


When you come to buy home insurance after you have been made bankrupt in the past, even if your order has been discharged in full, you are still likely to encounter a great deal of difficulty when buying online. Most insurers will reject your application outright. With HomeProtect you can receive a competitive online home insurance quote, even if you (or anyone else in your household) have previously been made bankrupt.

Your Home and Bankruptcy

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