If you have found yourself in hard times and your bills and debts are becoming increasingly hard to stay on top of, or you just can’t see a way out of paying them all off, you may be contemplating bankruptcy. You may already know that once you’ve been declared as bankrupt, you will be considered as such for at least 12 months and that your debts will be covered and sorted.
However, there is a little more to it than that. To help you fill in the blanks a little, in the following post we are going to look at just what happens after bankruptcy in greater detail.
Restrictions in Place after Bankruptcy
As you’re probably aware, restrictions are put in place over what you can and cannot do following bankruptcy. This includes:
- If you’re a resident of Northern Ireland, you can’t leave the country without receiving official permission
- You can’t change your business name if you are currently working in a self-employed capacity
- You can’t use the ‘right to buy’ council house buying scheme for your own council property
- You can’t be a company director – you need to wait until after your bankruptcy period has cleared before you can become the director of a company again.
- You can’t borrow any amount over £500 without first informing the lender that you have been made bankrupt – you always need to declare it and it could affect your chances of securing loans
Other Things That Can Happen After Bankruptcy
In addition to the above, there are also other things you need to consider regarding bankruptcy.
Your current bank accounts will normally be closed once you go bankrupt, which means you will need to open a brand-new account with a different financial institute.
Loans and Credit
As we already noted, you need to declare bankruptcy when you are looking for loans over £500. In general, going bankrupt can have an impact on how easy or hard it is to get credit and loans and your credit rating.
Is it Possible to Buy a House After Bankruptcy?
Although it may seem a little bleak, given how bankruptcy can affect your credit score and report and whether you can get a loan or not, when it comes to getting a mortgage for a house. However, there is still a way you can get a mortgage after bankruptcy.
You can do taking the following measures.
If you stand any chance of putting forward a successful mortgage application, you need to have your bankruptcy discharged. This is a special order given by a bankruptcy court accomplishing two main things:
- It stops creditors from trying to collect on debts that have been discharged
- It releases you from the liability over specific debts
Which essentially means you don’t need to pay those debts and the creditors you owe can’t do anything to force you to pay.
Check Your Credit History Report
Although bankruptcy will stay on your report for as much as 10 years, it doesn’t necessarily mean you can’t get a mortgage. You can make things a little quicker by checking your credit report and ensuring its up-to-date and accurate.
Rebuild Your Credit History
You need to be able to prove you can be trusted with loans and repaying them after bankruptcy to successfully apply for a mortgage. Although there are not many options open to you, for taking on credit, you can try instalment loans and secured credit cards. Use these and pay them back in time to improve your credit rating.