After you go bankrupt, the official receiver will compare your living expenses budget to an agreed set of spending restrictions. If they believe you have any surplus income after the agreed amounts are covered, you will be asked to pay this towards your debt.

Included in this article:

• What are the bankruptcy spending restrictions for 2022?
• Do you keep control of your money when you are bankrupt?
• What if you need to spend more than the allowances?

Need assistance with your bankruptcy living expenses budget? Give us a call (0800 077 6180) or complete the form below.

What are the bankruptcy spending restrictions for 2023?

As part of the bankruptcy application process, you have to give detailed information about your living expenses budget. The Official Receiver (OR) will compare this to your income to establish whether or not you have any money left over – a surplus income.

If you have no surplus, you will not be required to make any payments towards your debts. However where do, you will be expected to pay this to the OR for 3 years.

The OR will expect your expenses budget to adhere to the prescribed spending restrictions (as listed below). Where it contains figures that are higher, these will have to be reduced unless they can be justified.

It is therefore extremely important to understand what the spending restrictions are. You can then calculate whether or not you are likely to have to make any ongoing payments once you are bankrupt and prepare to justify areas in which you exceed the prescribed amounts.

Housekeeping – Groceries & Toiletries
Single person: £220/mth
Couple: £350/mth
Each additional child: £90/mth
Additional meals at work budget: £40/mth (per working adult)
Additional school lunches: £40/mth/child

Clothes
Single person: £30/mth
Couple: £50/mth
Each additional child: £20/mth
Additional School Uniform: £17/mth per child

Entertainment & Hobbies
Single person: £30/mth
Couple: £50/mth
Each additional child: £15/mth
Additional school trips / pocket money: £20/child

A complete list of all of the expenditure categories and restrictions is available in our bankruptcy living expenses guide. A copy of the guide can be downloaded by clicking on this link: Download living expenses guide

Struggling to get your head round all of this? We can help. Call us (0800 077 6180) or complete the form below. The advice is free and confidential.

Do you keep control of your money when you are bankrupt?

Once your income and expenses budget has been reviewed and any monthly payment agreed, you are left in control of your money. Really there is no difference to before you were bankrupt.

You are allowed to have a bank account where any income you receive can be paid in and from which regular payments can be made.

That said, it will be more important than ever that you make sure that you manage your spending very carefully. If you go over your monthly budget in any area, you will have to cut back elsewhere. You won’t have any credit facilities to fall back on.

It is likely you will also need to save a certain amount of money each month to cover living expenses which you don’t pay for regularly. Examples of these type of expenditures are car MOT and maintenance costs or school uniforms.

Once you are bankrupt, you will not have to struggle to maintain ongoing debt payments. However, you will have to live within your agreed living expenses budget based on the prescribed spending restrictions.

What if you need to spend more?

Your bankruptcy living expenses budget may include amounts that are higher than the spending restrictions guidelines.

For example, if you have a medical condition which requires a particular type of diet, you may need to spend more in the area of housekeeping or medicines and supplements. You may have a long commute to work meaning your petrol expenditure is higher than normal.

In these circumstances, you should submit the amounts you believe you need rather than putting down lower amounts.

The Official Receiver will review your figures on a case by case basis and give you the opportunity to justify the additional spending. If the your need is clear and reasonable, it should be allowed.

Some monthly expenditures don’t have to be justified or accounted for. For example, where you receive certain benefits such as DLA or PIP. Instead of trying to list in your budget all the different things you use this income for, you can simple include a collective amount called “PIP expenditure”.

Want assistance to go bankrupt? Give us a call (0800 077 6180) or complete the form below. The advice is free and confidential.