Some of the consequences of Bankruptcy cannot be known for certain until you actually go ahead with it, because they depend upon the findings of your Bankruptcy Trustee’s investigations. There is one thing that is certain, though, which is that it is going to affect your credit file.
Declaring yourself Bankrupt will place a mark on your credit file for a period of seven years from the day your application is accepted. You will find that whilst you are a Bankrupt person you are not actually allowed to apply for credit over a certain amount without declaring the fact that you are Bankrupt. It is probably easier to assume, though, that you will not be applying for credit at all whilst you are Bankrupt, which is usually for three years.
So when you come out of Bankruptcy there will still be a four year period where you will have a mark on your credit file. You may find, however, that having this default is not as bad as it sounds. For one thing, you will have just spent three years living entirely without credit and instead using your own available funds. You will have learned to budget, and without any creditor repayments to make you may have managed to put some money into savings.
Also, just because you have a default against your name, that does not necessarily mean that you will not be able to get credit. If you are earning a good income and you have some savings behind you, you may find that the default will not stop your application. And if you are applying for a secured loan to purchase an asset, or you have an asset that you are willing to put up as security, you will be considered a lesser credit risk than if the credit was completely unsecured.
The default on your credit file when you declare yourself Bankrupt is designed to give you a fresh start, to stop you from being able to keep adding to your debt and give you time to become financially rehabilitated. And with some planning and saving during your years as a Bankrupt person, you will find that credit will still be available to you in the future – if not during the seven years that you have a default, then after, when the mark is completely wiped from your credit file. If you are considering Bankruptcy and are concerned about the effect it will have on your credit history, call our consultants today on 1800 676 598 for free and impartial advice on gaining credit after Bankruptcy.