How will bankruptcy affect my credit rating?
If you declare yourself bankrupt, your credit rating will become worse. This is unavoidable.
In bankruptcy, you will pay less to your creditors each month than you originally agreed. It is therefore highly likely that they will view your account as being in default and issue you with a default notice.
Your bankruptcy and any default notices will be recorded on your credit file and remain there for 6 years. During this time, the bankruptcy order and all late payment records and default notices will show up if anyone carries out a credit check against you. This is very likely to stop them from lending you more money.
See below for more information about how bankruptcy affects your credit rating and ways to improve your credit rating.
-
Nothing to display at the moment, we’ll work on that
Borrowing more while you are bankrupt
Be aware that while you are bankrupt you are not allowed to borrow more than £250 without first declaring to the person you wish to borrow from that you are going through a bankruptcy procedure. For this reason it is generally not a good idea to try and borrow until you are discharged from your bankruptcy.
Wouldn’t my credit rating be affected anyway?
If you are struggling with debt and you are no longer able to pay your creditors, your credit rating will be affected whether you declare bankruptcy or not.
As such, if you are in a position where you are unable to afford to pay your creditors and cannot help but miss your normal payments to them, worrying about your credit rating should not be the primary factor to consider when deciding whether to declare bankruptcy or not.
Improving your credit rating
If you believe that your credit rating is already poor or you have been refused credit and do not know why, have a look at the BeatMyDebt.com 'Improve My Credit Rating' guide. This guide will help you understand why you have a problem and what you can do to improve your credit rating. You can also get a free credit report
here.
To access the guide See the 'Related Links' box above.
WHERE TO START take the first step, call us now on 0800 077 61 80
WHERE TO START
take the first step, call us now on 0800 077 61 80
Find out which solution is likely to be best for you by using our debt analyser, which you will find in the left and right hand columns of this website.
It is free to use and, as well as a detailed report on your best options, you will receive a copy of the eBook ‘IVA & Bankruptcy’ by James Falla.
If you have questions, just ask!
We have debt experts on hand to answer your questions with unbiased, accurate advice that is best for you, not your creditors.
You can ask your questions in our
debt forum or by
traditional email, whichever you prefer.
Our debt experts have written books and almost 2500 articles on the issues surrounding personal debt in the UK.
You can
search our articles here to find more information on your individual circumstances.
* you get this book free (ebook version) if you use our debt analyser
The quickest way to start beating your debt is to
call us...
0800 077 61 80
Calls are free from a landline (mobile networks vary)
and all conversations are held in the strictest
confidence and without obligation.
More Information: Expert articles
To read articles about bankruptcy arrangements written by our experts please see the 'Articles and News' box above.
If this information helped you, please help others to find it easier by clicking
these: