Can you be declared bankrupt for unpaid debts?
Insolvency Act · sources read 5 Oct 2026
A creditor can ask the High Court to declare you bankrupt for an unsecured debt of at least KSh 250,000 (the level set in the Insolvency Regulations) that you appear unable to pay, usually after you ignore a written demand for 21 days. You can also apply yourself, or use an alternative such as the no-asset procedure (debts of KSh 100,000 to 4 million and no assets).
- Deadline
- 21 days to pay or set aside a statutory demand
- Deadline
- Bankruptcy normally ends automatically after 3 years
- Deadline
- The no-asset procedure ends after 12 months
- Where
- High Court (bankruptcy cases); Official Receiver, Business Registration Service, UpperHill Chambers, 2nd Ngong Avenue, Nairobi
Steps
- A creditor usually starts with a written (statutory) demand. If 21 days pass and it is not paid or set aside, you can be treated as unable to pay.
- Bankruptcy applications, by a creditor or by you, are heard by the High Court.
- If you apply yourself, take your petition papers to the Official Receiver at BRS first to confirm they comply.
- If you have no assets and debts of KSh 100,000 to 4 million, you can apply to the Official Receiver for the no-asset procedure instead.
- For smaller debts (up to KSh 500,000), you can ask the Official Receiver for a summary instalment order to pay in instalments.
Watch out
- A creditor's application must be for a fixed, unsecured debt. A debt backed by security, like a charged title, generally does not count.
- The no-asset procedure is not available if you used it before or were ever declared bankrupt.
- While bankrupt you cannot be a company director or manage a company without the court's permission.
Who this covers
- Anyone who owes money: a creditor can apply, or the debtor can apply.
- The debtor must be domiciled or present in Kenya, or have lived or done business here in the last 3 years.
- For a creditor's petition, the unpaid unsecured debt (or debts together) must be at least KSh 250,000, the bankruptcy level set in the Insolvency Regulations.
Official sources (4)
- Insolvency Act, 2015 (No. 18 of 2015), Revised Edition 2021 new.kenyalaw.org · read 5 Oct 2026
- A layman's guide to insolvency, part 1 brs.go.ke · read 3 Oct 2026
- General overview of the debtor's bankruptcy proceedings brs.go.ke · read 3 Oct 2026
- Insolvency Regulations (L.N. 47 of 2016), version of 31 December 2022 new.kenyalaw.org · read 5 Oct 2026