On 22 July 2011, Bullard was suspended by Hull City following an incident at Hull's training camp in Slovenia the previous week, which was believed to be a breach of the club's alcohol policy. On 18 August, Hull announced that they have terminated Bullard's contract. Bullard received an out of court settlement after the unlawful termination of his contract.
On 27 January 2011 he joined Ipswich Town on loan. He scored on his debut in a 2–1 victory at Derby County on 1 February 2011. Hull City said his exit saved the club £320,000 in wages, as he had signed a £45,000-a-week contract for them while they were still in the Premier League.
Bullard scored five times in 16 appearances for Ipswich. He won the Supporters' Player of the Year award, despite only being with the club for three months. Some supporters called for the manager, Paul Jewell to sign him on a permanent basis. However, with Bullard's wages being so high at Hull, chances of a permanent move being agreed looked unlikely. On 3 April 2011, Bullard admitted that he would be interested in a move to Ipswich, and that he would be prepared to take a pay-cut.
On 25 August 2011 Bullard joined Ipswich Town on a permanent deal, signing a two-year contract. After starting positively, injuries meant he spent the majority of the remainder of the season on the bench. Bullard was suspended for two weeks while Michael Chopra was fined two weeks wages by the club due to being late to training after a drinking spree. Jewell explained that Bullard and Chopra committed the same offence, but Chopra was suffering from off-the-field issues, therefore it would be inappropriate to suspend him. Jewell highlighted that Bullard "loved playing football and training", deciding that a two-week suspension was the best way to discipline him. Jewell admitted "It's never easy to suspend a player who I have signed twice, who is the life and soul of the dressing room".