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After bankruptcy

Can I get credit after going bankrupt?

Bankruptcy will affect your credit rating and will make it difficult for you to get a loan or any other types of credit.

Until you’re discharged from your bankruptcy it’s against the law to borrow more than £500 from any lender without telling them you’re bankrupt. You don’t need to tell them if you’re borrowing less than this, but they’ll usually find out by credit-checking you.

Details of your bankruptcy will remain on your credit file for six years from the date the court makes you bankrupt. This means that your bankruptcy will continue to affect your credit rating for some years, even after you have been discharged from it.

Once you’re discharged from your bankruptcy there’s no legal limit on borrowing money but you’ll find it much harder. It’ll be difficult for you to apply for a loan or other credit, such as an overdraft, during the six-year period following your bankruptcy. You may be refused credit or charged a higher rate of interest because your bankruptcy makes you appear to be a bigger risk to lenders.

If your official receiver finds that you acted dishonestly or irresponsibly, they can apply a bankruptcy restriction undertaking (BRU) or order (BRO) which will extend some of the effects of your bankruptcy for up to 15 years. Although these are not common, if a BRU or BRO is applied, it’ll be recorded on your credit file until it ends, which could be longer than the normal six years.

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How to get a mortgage after bankruptcy

You may find it difficult to apply for a mortgage after bankruptcy.

Bankruptcy will remain on your credit file for six years so any mortgage lenders will be able to see it. It’s also likely that a mortgage lender will ask you if you’ve ever been bankrupt, if you decide to apply for a mortgage.

Although you may find it difficult to get a mortgage after bankruptcy, different lenders will have different policies so it’s worth talking with them about it first. Some mortgage lenders will consider people with a poor credit score, however it may mean you have to pay a higher interest rate. If you’d like more advice about this, we have a specialist mortgage team who can help.

You may find it difficult to apply for a mortgage after bankruptcy.

Free bankruptcy advice

Bankruptcy isn’t the best solution for everyone and can affect your home and employment, as well as your ability to get credit. If you’re considering bankruptcy as a way of dealing with your debt problem make sure you get some free, expert advice first, as there could be a better solution for your circumstances.

Visit our online Debt Remedy tool, our online debt advice service, for an assessment of your situation and advice on the best way forward for you.

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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