After a bankruptcy discharge, your life will be very different. This article will explain how your life will change after you are discharged from bankruptcy.
Please note you may be able to end your bankruptcy early by cancelling it if you meet the requirements.
What happens after I have been discharged from bankruptcy?
Once you are discharged, all your debts will be written off. The bankruptcy order will be removed from the Individual Insolvency Register, this is usually within 3 months of the date of discharge. Your credit reference agency file will only show 6 years worth of information so the notice of the bankruptcy taking place will be stopped after 6 years of discharge. You can also apply for a certificate of discharge, which costs approximately £60, from the Official Receiver (OR). They are not automatically issued unless requested.
The following are things that can happen after being discharged from bankruptcy:
- You can open a basic joint bank account
- The OR can NOT get an Income Payment Order (IPO) after discharge
- An OR can repossess the property if started this during bankruptcy
- You can keep any inheritance/money if received after the bankruptcy discharge.
If you have been discharged from bankruptcy, are not subject to any restrictions, undertakings, Income Payment Order or Arrangements, then you no longer have any duty to report changes to your circumstances to the OR.
You should now look to improve your credit score, get a normal bank account and live life to the full (without the debt of course). If you have any doubts about any matters outstanding from your bankruptcy then you should ask the OR. Alternatively, you can contact the Insolvency Service Enquiry line.
Disclosing bankruptcy after being discharged
If you are being asked the question “Have you ever been declared bankrupt?” then you will need to answer the question truthfully. Some forms have a declaration at the end which you must sign to state the information you provided is accurate. If you have any questions about why this information is deemed necessary, you should ask the company asking the question. You may also be able to decline to answer the question.
Please note, your bankruptcy may no longer be showing on the Insolvency Register. Unless restrictions were placed or an error has occurred. It could be that the Bankruptcy could still be traced by contacting the Insolvency Service. Or by checking the London Gazette or local press records. Therefore it is always important to be truthful on any application.
Do I have to declare bankruptcy after 6 years?
After you are discharged from bankruptcy there is no legislation saying you have to declare this in the future. You are however legally obliged to disclose your bankruptcy if directly asked. Especially if you want to work in the financial or legal sector (read our article: Does bankruptcy affect your employment).
Professional membership or licence may have a requirement to prove you are a “fit and proper person”. There may be a question about bankruptcy within the application. It could appear on an application for credit and may simply ask have you ever been subject to bankruptcy.
Can I apply for a mortgage after being discharged?
The fact that you have gone bankrupt may make it more difficult for you to get a mortgage, however, it should not be impossible. You’ll need to show you can borrow responsibly to do this by managing your current account and possibly a credit card (normally a high APR one). If you pay back all of your borrowing every month and show you are safe, you’ll be okay. Your bankruptcy will stay on your credit file for 6 years. You may also want to consider getting a mortgage after 6 years.
How do I find a record of my past bankruptcies?
If you can not find any record of past bankruptcies online on the Insolvency website register, you can do the following:
- Contact the County Court: It is likely that the County Court in which you were declared bankrupt will have a copy of the bankruptcy order archived which should be available on request.
- Speak to Credit Reference Agencies: You can contact the credit reference agencies and request a copy of your details and see if your creditors are still reporting any information about debts owed, or if there have been any court actions within the last 6 years.
- Contact Creditors directly: You can contact the creditors directly and ask for any information they still hold about your debts
Please note, the bankruptcy record is removed from the Insolvency Register three months after discharge. Six years after the bankruptcy date it will be removed from your credit record.
Loans after being discharged
During the 6 year period after you’ve been discharged, you will find it difficult to get loans or credit. Since bankruptcy affects your credit rating, you may find that you will be charged a higher interest rate and could be refused credit. In some situations, it may not cause any problems. For example applying for a Motability car scheme, as a credit check is not necessary for the assessment of eligibility for a Motability vehicle. For more information please see our article on loan management.
I was discharged from bankruptcy, do I need to pay my debt?
An old unsecured debt from a previous bankruptcy will be included in your current bankruptcy. After a bankruptcy discharge, you will no longer be asked to pay any debt owed. You could provide details of the bankruptcy to the debt collection agency and ask that they contact the OR who dealt with your bankruptcy.
Some debts, such as court fines and student loans, will survive bankruptcy and will still require payment after bankruptcy has ended, they will never be written off and an arrangement to pay may be necessary.
Need more help?
This question was answered by Debt Advice Foundation, an independent UK debt advice charity. If you need further help, Debt Advice Foundation provides a free, confidential helpline and can advise you. Click here to find out more.