How bankruptcy may affect you and your life

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How does bankruptcy affect my credit score?

Your bankruptcy will show on your credit report. This makes it harder to borrow money or get credit for a while. While you’re bankrupt, you must tell a lender if you want to borrow £500 or more.

When you’re thinking about bankruptcy, it’s important to think about how your choices might affect your family and your job. While bankruptcy is one option, there’s other ways to get back on track that might be a better fit for you.

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How long does bankruptcy stay on my credit file?

Bankruptcy usually stays on your report for six years. After that time, it’s removed and you’ll be able to start improving your score again. Even when it’s gone from your report, you should always tell the truth if a lender asks if you’ve ever been bankrupt in the past.

Will anyone know if I’ve gone bankrupt?

When you go bankrupt, your name and address are put on a public list called the London Gazette and the insolvency register. Usually, only people like banks or those you owe money to will look for this. Your friends, family and neighbours won’t typically see it unless they specifically search for it.

Bankruptcy can sometimes make things difficult if you want to run a business or work in certain jobs, like finance. Some employers might ask about your history when you apply for a new role. It’s a good idea to check your current work contract to see if there are any rules you need to know about.

Thinking about bankruptcy but unsure what’s right for you?

Get free debt advice online or call 0800 316 1833 to speak to one of our experts. We’ll explain the solutions available, check what you may be eligible for and help you choose the option that best fits your situation.

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FAQs

What if my bankruptcy has ended but I have no proof?

You can ask the Insolvency Service for a free letter to prove you are no longer bankrupt. It is a good idea to keep this letter safe. You can show it to the people you owed money to if they ever ask you for payments in the future

How do I know my bankruptcy has ended?

If everything goes to plan, your bankruptcy will end automatically. You might not get a letter to tell you this has happened. If you are unsure, you can look at the public Insolvency Register online to get an idea of when it finishes.

Who informs my creditors of my bankruptcy?

Once approved for bankruptcy, you will stop dealing with the creditors included in your bankruptcy, and making payments, and they will be unable to take any legal action against you. You will be assigned a Trustee to contact the creditors during your bankruptcy on your behalf.

Can I continue to apply for credit while I am bankrupt?

It is illegal to apply for £500 or more of credit while you are bankrupt without informing the lender that you are bankrupt. In any case, most creditors would run a credit check on you and discover the note on your credit file, which lasts for six years following the date you filed for bankruptcy. We would, therefore, not recommend applying for credit until your file is clear as if you’re refused credit, this can have an additional negative effect on your credit rating.

Can I cancel bankruptcy?

You can cancel bankruptcy, which would lift the restrictions on you and the impact on your credit rating sooner, but you can only do this if one of the following reasons applies:

All of your debts and fees for your bankruptcy have been paid in full by either you or a third party.
You’ve set up an Individual Voluntary Arrangement (IVA) instead.
The bankruptcy was set up in error.