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Life after Bankruptcy

Life after Bankruptcy

Bankruptcy does not last for ever. Normally it will be completed after 12 months. Many of the restrictions you were under will then be lifted. Having said that there are some aspects of bankruptcy which will affect you after the date you are discharged.

Your credit rating will be affected for 6 years from the date you went bankrupt. There are things you can do to improve this but borrowing will still be difficult in the medium term. In addition some windfalls you receive might still be payable to the official receiver.

Can you get a Mortgage after Bankruptcy?

Once you have been discharged from Bankruptcy it is possible to get a mortgage. However you will not be able to apply immediately. Normally you will need to wait for 2-3 years. By that time you should have been able to make some improvements to your credit rating.

BE Tip: The larger the deposit you are able to put down the more chance you will have of getting a mortgage. If someone is able to lend you the money you may be able to get a mortgage relativity quickly. However if you have to spend time saving this will of course extend the period before you can apply.

Can you add a Debt to your Bankruptcy?

Any unsecured debt that you owe at the time you go Bankrupt is included. This is the case whether you know about the debt or not. As such if you forget to include a debt or a new debt appears that you were not previously aware of it is automatically included in the procedure.

The reason for this is that Bankruptcy includes any debt or liability you are subject to or may become subject to on the date you become Bankrupt. As such if your home is repossessed any subsequent mortgage shortfall is included. This is the case even if the property is not sold until after you have gone bankrupt.

Improving your Credit Rating after Bankruptcy

The fact that you were Bankrupt remains on your credit rating for 6 years. However after you are discharged there are various things you can do to start improving your credit rating. These include checking there are no date errors on your credit file and starting to use credit responsibly.

Claiming for mis sold PPI after Bankruptcy

It is possible to claim for mis sold PPI after you are discharged from bankruptcy. However you are very unlikely to benefit from any compensation awarded. This is because the claims are regarded as unrealised assets.

In the same way as if you had made a claim during bankruptcy any compensation paid will still go directly to your Official Receiver. Even compensation awarded for PPI against a debt not included in your bankruptcy has to be paid to the official receiver.

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