Impact of Bankruptcy on my Credit Rating

Most people believed that bankruptcy is the most efficient means of the bondage of debt. The truth is, bankruptcy is a trade off. It clears or minimizes your debt to an amount you can afford to pay, but it tells the public that you’re a credit risk.

This bankruptcy information is intended for residents of England, Wales, and Northern Ireland. You may refer to Scotland sequestration for details about bankruptcy.

When on the verge giving up on your debt, filling for bankruptcy can be your last resort. After all, debt collectors can no longer harass you with debt payments. However, filing for bankruptcy can hurt your credit rating. In fact, it will be visible on your credit report for a couple of years. The least you can expect is six years’ endurance of the bankruptcy record in your credit, making it difficult for you to secure loans or a mortgage.

Though bankruptcy discharge can occur after a year, this will reflect on your credit report for at least six years. It can result in a dramatic drop in your credit score, making it hard for you to borrow and spend.

Getting a personal loan, credit card, or a mortgage can be very tough in the expected time, and it can take several years before the fallout from the bankruptcy to remove.

How long is the fallout of bankruptcy remain in my credit record?

The fallout of bankruptcy will reflect on your credit file for six years. This starts from the date you declare bankruptcy.

Though you can be discharged after 12 months, when you comply with your duties and responsibilities, still the impact it yields on your credit score is inevitable. Regardless of your strife to rebuild good credits, it will take time for you to repair your credit rating. Since your debt defaults in bankruptcy, you will endure its impact for a couple of years.

The default date has to be set no later than the date you go on bankrupt. This means your debt you obtained before going bankrupt will be wiped out on your credit file after six years. In fact, if your creditor or lender, falsely sets the default date, you can request to revised and correct it.

Moreover, the official receiver can set a bankruptcy restriction undertaking or BRU or order a BRO (bankruptcy restriction order), which aims to extend the restrictions for up to 15 years. This can happen if the OR of the official receiver determines fraudulent acts or negligence during or after your bankruptcy.

Can I still get credit when I go bankrupt?

During your bankruptcy, you cannot secure new credit larger than the sum of £500. You may have to wait for a discharge to occur. You must also inform the creditor or lender about your bankruptcy status if you tried getting a loan not greater than the allowed amount. In some cases, a higher interest rate will be impose by the lender or creditor.

Moreover, it might be hard for you to open a new bank account after bankruptcy, or get new credit, because of the bankruptcy record on your credit report. You can also read some of hour post relating to your life after bankruptcy for further information.