Getting credit cards after a bankruptcy discharge

What’s a bankruptcy discharge?

This simply means you’re no longer bankrupt and you’ve been freed from your bankruptcy debts.

Just so you know, bankruptcy laws in England say certain debts can’t be written off when you file for bankruptcy – you’ll remain liable for those non-bankruptcy debts after your bankruptcy ends. Some of these include:

 

• Any liability for a fine or security entered into before a court. This includes a public revenue offence.
• A liability for a confiscation order.
• Money owed under family proceedings (maintenance and lump sum settlements as well as costs orders).
• Student loans (taken out on or after 1 September 2004).
• An obligation for a budgeting loan or crisis loan from the Social Fund (where the bankruptcy petition was presented on or after 19 March 2012).
• Certain benefits and tax credit overpayments.
• Debts because of fraud or fraudulent breach of trust.
• Damages payable to anyone for personal injuries.
• Debts after the bankruptcy order.

How long does bankruptcy stay on your credit report?

Your bankruptcy will be listed on your credit report, which may mean it’ll be harder for you to get credit. The bankruptcy will stay there for six years after the bankruptcy order. That’ll be the case even if you’ve been discharged from the bankruptcy, which usually happens 12 months after you were first made bankrupt. Just so you know, this can be extended in some cases.

 

The bankruptcy may be on your credit file for longer than the standard six years if you enter into a Bankruptcy Restriction Undertaking (BRU). The same could happen if a Bankruptcy Restrictions Order (BRO) is made against you.

 

Borrowing before bankruptcy discharge

Before you’ve been discharged from bankruptcy, you must declare your status as an undischarged bankrupt to any lender you want to borrow £500 or more from. Please note, this is whether it’s just you or jointly with another borrower and it’s a criminal offence if you don’t declare it. But, there’s no limit on the amount you can ask to borrow.

 

What happens after a bankruptcy discharge?

If you make yourself bankrupt, or you’re declared bankrupt, you’ll usually be discharged 12 months from the date the bankruptcy order was made. But, your bankruptcy can be extended for longer than 12 months if you don’t co-operate with your trustee in bankruptcy.

 

It’s worth knowing you won’t be sent confirmation of your bankruptcy discharge. But you can get proof by getting a free confirmation letter. You can refer to the Insolvency Services Guide on Bankruptcy for more info on how to get this letter.

 

Or, you can get a Certificate of Discharge from the court that dealt with your bankruptcy (there’ll be a fee and charge for each extra copy). When you’ve completed a discharge of bankruptcy in UK courts, your details will be removed from the Individual Insolvency Register within three months. If you want to have your bankruptcy removed from the Land Charges Register, you’ll need to apply to the Land Charges Department.

 

If you want the discharge to show on your credit file, you’ll have to send confirmation to each of the main credit reference agencies - Equifax, Experian and TransUnion - to ask them to update your file. Your bankruptcy will still show on your credit file for six years after your bankruptcy discharge date. But, once your bankruptcy’s been discharged, you can start to rebuild your credit file.

 

Borrowing after bankruptcy discharge

You don’t need to declare your bankruptcy to any lender once you’re discharged (usually after 12 months), though they may still see you as a credit risk.

 

Next steps

 

Our opinions and insights don’t address your individual requirements and are for information purposes only. It isn’t legal advice so you may want to get specific guidance that fits your financial situation.

 

Vanquis Credit Card for discharged bankruptcy

If you’re looking to rebuild your credit score following a bankruptcy, a Vanquis Credit Card could help you get back on track.

 

How to apply

See the steps below for how to apply for a Vanquis Credit Card.

FAQs

Can I file for bankruptcy on credit cards?

Yes. When you file for bankruptcy, you submit what’s called a bankruptcy application.

 

You can include any of the following debts in your bankruptcy application.

 

• Credit cards
• Personal loans
• Household arrears, like Council Tax
• County Court Judgments

 

What are the best credit cards for bad credit?

If you have a poor credit score, it can be difficult to get a regular credit card, let alone one with lower interest rates and a higher credit limit.

 

To access more credit options in the future, you may want to look at building your credit score. Those with poor scores are more likely to only be accepted for a credit builder credit card. These often start with a higher rate of interest and a lower credit limit. With good money management, cardholders can use their credit builder cards to make small purchases, show their financial responsibility to lenders and grow their score.

 

Why not check out the Vanquis Credit Builder Credit Card?

 

Does bankruptcy clear all my debt?

While bankruptcy means you don’t have to pay some of your debts during the bankruptcy, there are other debts you must continue paying. What they are will determine whether your bankruptcy allows you to pause repayments.

 

How much will my credit score drop after bankruptcy?

This largely depends on how the credit reference agency sees your circumstances. But, if you declare bankruptcy, it’s possible your credit score will be classed as ‘poor’ - even if you had a perfect one before.

 

How quickly can I rebuild my credit score?

With good money management, you can see improvements in your credit score in a few months. But, when bouncing back from a big setback like a bankruptcy, it can take several years to repair.

 

As bankruptcy stays on your credit file for six years, it can be difficult to achieve a healthy credit score while it’s there.