How long does bankruptcy stay on your credit report?
Your bankruptcy will be listed in your credit report which may mean it will be harder for you to get credit. The bankruptcy will stay on your credit report for 6 years after the bankruptcy order is made. That will be the case regardless of whether you have been discharged from the bankruptcy, discharge usually takes place 12 months after you were first made bankrupt, but can be extended in certain cases.
The 6 year period the bankruptcy will be on your credit file can be longer if you enter into a bankruptcy restrictions undertaking or a bankruptcy restrictions order is made against you.
Borrowing before discharge from bankruptcy
Whilst you are bankrupt and before you have been discharged from bankruptcy you must declare your status as an undischarged bankrupt to any lender from whom you (whether by yourself or jointly with another borrower) seek more than £500 in credit. It is a criminal offence if you do not declare your status as an undischarged bankrupt.
There is no limit on the amount you can seek to borrow but you must declare your status as an undischarged bankrupt where the amount you are seeking to borrow is more than £500.
About bankruptcy discharge
Being discharged from bankruptcy means you are no longer bankrupt. Officially it means you have been released from liability for your bankruptcy debts.
You should know that bankruptcy laws in England state that certain debts will not be bankruptcy debts and you will remain liable for those non-bankruptcy debts after you have been discharged from bankruptcy. These non-bankruptcy debts include (non-exhaustive list):
- Any liability in respect of a fine, or a security entered into before a court, including one imposed for a public revenue offence;
- A liability in respect of a confiscation order;
- Money owed under family proceedings (maintenance and lump sum settlements as well as costs orders);
- Student loans (certainly all those entered into on or after 1 September 2004);
- An obligation in respect of a budgeting loan or a crisis loan from the Social Fund where the bankruptcy petition was presented on or after 19 March 2012;
- Certain benefits and tax credit overpayments;
- Debts incurred by fraud or fraudulent breach of trust;
- Damages payable to anyone for personal injuries;
- Debts created after the bankruptcy order
Bankruptcy discharge – what happens next
If you declare yourself bankrupt, or you’re declared bankrupt, you’ll usually be discharged 12 months from the date the bankruptcy order was made. However your bankruptcy can be extended for longer than 12 months if you do not co-operate with your trustee in bankruptcy.
It’s worth noting that you won’t be sent confirmation of your bankruptcy discharge, but you can get proof of your discharge by getting a free confirmation letter. You can refer to the Insolvency Services Guide on Bankruptcy for details on how to obtain this letter.
Alternatively, you can get a Certificate of Discharge from the court that dealt with your bankruptcy, subject to a fee and charge for each extra copy. When you have completed a discharge of bankruptcy in UK courts, your details will be removed from the Individual Insolvency Register within three months of your discharge. If you want to have your bankruptcy removed from the Land Charges Register, you’ll need to apply to the Land Charges Department.
If you want your discharge to show on your credit file, you’ll need to send confirmation to each of the main credit reference agencies - Equifax, Experian and TransUnion - and ask them to update your file. Your bankruptcy will still be visible on your credit file for six years after your bankruptcy’s discharge date, but once your bankruptcy has been discharged, you can start to rebuild your credit file.
Borrowing after discharge from bankruptcy
Once the bankruptcy is discharged (usually 12 months) there will be no obligation on you to notify a lender of your bankruptcy status although lenders will consider whether to lend to you in light of your former bankruptcy.
Here are some useful next steps for after bankruptcy:
Rebuilding credit after bankruptcy
- Once you’re discharged, there’s no requirement to declare your bankruptcy to any lender, but you may still be seen as a credit risk by lenders.
- You might find it difficult to get accepted for loans, credit cards and overdrafts for the six years that the bankruptcy is visible on your credit file.
- Some lenders may refuse to lend to you altogether.
- Before you apply for any form of credit after bankruptcy, you should make sure your discharge has been included on your credit report.
- You should also check your credit report for any mistakes and get these corrected by telling the relevant credit referencing agency to get them corrected.
How to get credit after bankruptcy
- Whilst repairing your credit rating after bankruptcy is difficult, it's not impossible.
- You should follow all the terms of your bankruptcy order while it is in effect and do everything you can to keep up with repayments on any debts it doesn’t cover.
- A budget planner can help to keep track of your monthly income and outgoings.
- If you think you might have trouble meeting a repayment, speak to your advisor as soon as possible to work out a solution.
- Ensure you can pay back what you borrow. This is one of the fastest ways to rebuild your credit rating, as it demonstrates that you can borrow and repay within limits.
The information and opinions we provide do not address your individual requirements and are for informational purposes only. They do not constitute any form of legal advice, please seek specific advice relevant to your particular circumstances.
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If you’re looking to rebuild your credit score following a bankruptcy, a Vanquis credit card could help you get started.
How to apply if you’ve been through bankruptcy
See our steps below to find out how to apply for a Vanquis credit card following bankruptcy.
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