Borrowing after Bankruptcy

Rebuilding your credit history

We receive a lot of calls and emails from the public asking about; "Borrowing After bankruptcy?"

After bankruptcy you may want start to rebuild your credit history and start borrowing money again.  Borrowing after bankruptcy will be more difficult because an ex-bankrupt is considered a bigger risk. The advice team at Money Advice Direct help thousands of people begin their life after bankruptcy with greater opportunities than ever before because going through bankruptcy can be a life changing “wake up call”.

***IMPORTANT NOTE**
You should check your credit report before borrowing after bankruptcy. Make sure that it states you have been discharged from bankruptcy. You may also wish to add a note on your credit file outlining the reasons for your bankruptcy.

After bankruptcy you may want to consider the following types of borrowing:-

• Bank overdraft
• Personal loans
• Credit cards
• Store cards and in-store finance
• Mortgages

As an ex bankrupt a person may be charged a higher rate of interest on borrowing. The interest rate varies depending on the type of loan. All lenders have to tell you what their APR is so make sure you read the small print because borrowing after bankruptcy can be expensive.

Mortgages after bankruptcy
As soon as a bankruptcy order is completed, you may be able to obtain a mortgage. What with the “credit crunch” at the moment banks won't or can't lend a lot of money. Suddenly it has got very difficult to borrow money. It is still possible to get a secured loan or mortgage or credit after bankruptcy but the interest rate will be high for people borrowing after bankruptcy.

UK car loans for people with bankruptcy
The motor industry is always keen to sell more units so car loans are more readily available are more readily available than you may think. As soon as your bankruptcy is over, you may be able to obtain one. It is always best to shop around for the best deal. There are a number of bankruptcy car loan lenders that can be found in the national media.

Sub-prime lenders for borrowing after bankruptcy
Sub-prime lenders are licensed lenders who are willing to make loans to people who are unable to get credit from mainstream lenders because of a poor credit record or for people looking at borrowing after bankruptcy. They often charge a much higher rate of interest than banks and building societies.

Beware of loan sharks for borrowing after bankruptcy
Loan sharks are unlicensed lenders. They operate illegally and will lend you money when nobody else will, but: their rates will be very high and you may find it difficult to keep up the repayments; and you may be forced to get a second loan to pay off the first, causing your debts to spiral out of control. They may use harmful methods to collect money such as threatening you or your family.

Borrowing money after bankruptcy can sometimes seem a little daunting. If you have any questions about borrowing after bankruptcy then please call 0800 074 6918.

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