HOW LONG DOES A BANKRUPTCY STAY ON CREDIT REPORT | 2024
How long does bankruptcy stay on your credit report?

March 2024

How long does bankruptcy stay on your credit report in March 2024

How does bankruptcy work?

Bankruptcy is a legally declared inability or impairment in the ability to pay debts by an insolvent person. This means that you are unable to pay your debt fully and therefore bankruptcy will be declared. Under UK bankruptcy law, people might qualify for bankruptcy under different criteria/rules.

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The main benefits of declaring bankruptcy are that it automatically stops all legal actions against you, and your creditors can’t demand payment from you.

Your bankruptcy will appear on your credit file for six years from the date of the order being made. However, if it’s annulled before six years have elapsed, then this period doesn’t count towards your bankruptcy duration.

How can bankruptcy happen?

There are several ways you can get yourself into debt and declare bankruptcy. In general, if you’ve got more debts than your income then you may end up in a situation where it is difficult to pay back the money that is owed to your creditors.

You could end up in this position for a number of reasons:

  • falling behind with bills/rent/mortgage payments and therefore having a poor payment history
  • having unexpected costs, like an illness or an accident which you can’t pay for
  • owing tax

It is also possible to get yourself declared bankrupt if you’ve got assets which are worth more than your debts, even though your income is too low to repay them. If this happens, the court will sell off your assets to repay your creditors.

In some cases, you may have a specific reason why you want to declare bankruptcy. For example, if you feel that a creditor has been harassing you and owes you a significant amount of money, it might be worth going for this option.

You can also declare bankruptcy voluntarily if it makes sense in terms of your debts and income, but there are some risks here. If your bankruptcy is declared voluntarily then you have to wait two years before you can apply for an annulment. Also, it’s more difficult to re-mortgage your house if you’ve declared voluntary bankruptcy.

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How will bankruptcy affect my life?

Bankruptcy will cause you problems when it comes to applying for loans, credit cards and other services in the future. For example, it’s very difficult to get a mortgage if your debts are being paid through bankruptcy. This is because lenders can refuse or cancel your loan while you’re bankrupt.

Normally, while you’re paying back any debts through the bankruptcy, your creditors won’t bother you, but this can vary depending on which bankruptcy method you choose.

This will usually depend on how much money and assets you have and whether or not there is a possibility that they could be sold off to pay your debts. If so, many of your creditors might try to contact you to get their

Once you’ve had your bankruptcy order made, different things will happen.

  • You’ll lose control of any property or possessions which are owned by the bankruptcy estate. This means that this property is sold and the proceeds used to pay off your creditors/debts. The trustee in bankruptcy may also take some of your other assets, such as a car, if they’re worth more than a certain amount.
  • You won’t be able to start or continue legal actions against any of your creditors without the permission of the court, and you could end up being made liable for their costs
  • Any income that is yours will also form part of the estate, so it can be used to pay off your debts
  • You’ll need to tell the trustee in bankruptcy about any property you own, as well as anything which you acquire or receive
  • If your monthly income is more than a certain amount, you’ll have a duty to inform a creditor who isn’t listed on your bankruptcy order if you’re owed money from

How long will bankruptcy affect my credit file?

This depends on how your bankruptcy ends. This could be:

– an individual voluntary arrangement (IVA)

– a debt relief order (DRO)

– the discharge of bankruptcy after you’ve paid off your debts in full, or the annulment of your bankruptcy – this means that it never happened and any record should be removed

Bankruptcy will stay on your credit report for 6 years after the date you made it

For an IVA, bankruptcy will stay on your credit report for 6 years from the end of the IVA (so four and a half years after your bankruptcy order)

– A DRO lasts for one year, so the bankruptcy will be on your credit file for seven years from this date

– If you pay off your debts in full, it’ll stay on your credit file for six years after the date of discharge (or five and half years if there is no bankruptcy discharge)

– If you’re made bankrupt again within six years of your previous bankruptcy order , this will not affect the six-year bankruptcy period on your credit report

– If you get annulled bankruptcy, it won’t show up on your credit file once it’s removed

– Any non-default entries that were present on your credit score report at the time your bankruptcy order was made will stay there for six years (or up to 12 years if the information is inaccurate)

"Bankruptcy will cause you problems when it comes to applying for loans, credit cards and other services in the future. For example, it's very difficult to get a mortgage if your debts are being paid through bankruptcy. This is because lenders can refuse or cancel your loan while you're bankrupt."

Rebuilding credit after bankruptcy

You can start rebuilding your credit after you’ve been discharged, as any work towards credit repair would be beneficial. Start by ordering a copy of your credit report, which will help you to understand what’s reported on it.

It might be difficult at first, but it’s important that you contact the lenders that are currently reporting as ‘not known’ or ‘never heard of’. You’ll need to ask them to confirm your address, date of birth and any other personal details which you know are correct.

You can ask the credit reference agencies to remove these ‘not known’ entries from your report if they can confirm your identity – this will show lenders that you are interested in borrowing again.

Here are some other tips that you can follow.

  • Keep credit cards and loans down to a minimum
  • Stick to the terms and conditions of any new credit you apply for
  • Use your current address when applying, as lenders may refuse people with different addresses on their record. Some lenders only offer products to customers who have lived in an area for at least six months
  • Apply for a secured credit card or debit card (if you can’t get one, try and build up a good repayment history on your existing accounts)
  • Apply for financial products such as mortgages
  • Avoid a missed payment with existing creditors. A late payment could even have negative consequences

Can I remove a bankruptcy off my credit report?

Yes – the only way to do this is by applying to court and asking for your bankruptcy order to be removed.

The courts will carry out a review, but you may need to provide them with evidence that:

– Your conduct has been ‘fair and honest’ since your bankruptcy ended

– You have not remained an undischarged bankrupt

– You have not been made bankrupt again

If the court decides that your conduct has been ‘fair and honest’, they will give you a ‘discharge’ or annulment order. This means that all records of your bankruptcy will be removed from credit reference agencies, public registers and newspapers. It will normally take around 4 weeks for this to happen.

If there are any non-default entries on your credit file at the date of your bankruptcy order, they will stay for six years from this date or up to 12 years if they contain inaccurate information about you .

Getting credit after bankruptcy

Most lenders won’t accept you as an existing customer if you owe them money. But there are some exceptions, including:

  • utility companies (water, gas and electricity)
  • mobile phone providers
  • telephone directory enquiries services

If a lender agrees to give you a loan after bankruptcy, they will charge a high interest rate. This is because your credit rating will have been badly damaged by the bankruptcy – so it’s important that you only borrow the amount that you really need. In some cases, however, other people might decide not to lend to you even if they don’t show up on your file at all . You can improve your chances of being accepted for future loans/credit by following these steps:

– Check your credit report to see what is recorded about your financial history

– If you have any inaccuracies, contact the relevant company and ask them to update – this will help when applying for credit in the future

– Ask for a copy of your credit report from the leading credit report agencies, such as Experian, Callcredit and Equifax, and keep it safe. The credit reporting agency will tell you what information they have on you. You can then use it as evidence that you’re making an effort to rebuild your finances, which will be useful if you apply for unsecured credit such as a loan or overdraft in the future

– Keep all existing repayments up to date with creditors who aren’t showing on your record so that you improve how lenders view you. It’s also advisable not to miss any repayments even if this creditor doesn’t show up on your file

– Apply for credit and mention any credit agreements you’ve had in the past – but don’t lie. This can be held against you later if lenders do a credit search and find out that you didn’t provide complete information

– Ask whether another person could apply instead. If they have a good financial history, this may improve your chances of being accepted by lenders

How much will my credit score increase after bankruptcy falls off?

It depends on your financial behaviour . If you’ve got a clean credit history and haven’t applied for several loans, it may be higher than before the bankruptcy

  • if your financial history is poor, it may not improve much at all. If this is the case, try and improve your credit rating by making repayments on time and applying for less credit in future.
  • Don’t apply for a loan unless you really need it and make sure you can afford the repayments before signing anything.

After 6 years, the bankruptcy filing will be ‘spent’ and your credit score will return to what it would have been if you had never filed for bankruptcy. After 12 years, all records of the bankruptcy should be removed from public registers like online phone books

12 months after bankruptcy

If you’ve spent the last 12 months without committing any more debts, your bankruptcy order will be annulled or discharged. This is called ‘discharge from bankruptcy’

This means that your name will be removed from public registers, like online phone books and credit reference agencies. Any entries about the bankruptcy still on your credit file should also disappear. Your creditors are also legally obliged to stop contacting you

You must make it clear to utility companies – gas, electricity, water etc – telecoms providers (phone/mobile) – directory enquiries numbers – that they are not allowed to pass details of your bankruptcy to other people by putting a note on their own records .

15 months after bankruptcy

After 15 months, you can begin rebuilding your credit rating. You’ll need to let credit reference agencies know that there is no longer an official bankruptcy in place. They might ask you for proof if this isn’t clear in the records, but once they’re satisfied this will be removed after 6 years.

Your debts after discharge from bankruptcy

Your unsecured debts or personal loans should be settled by the Insolvency Trustee during the bankruptcy process. Any other money owed should be repaid in full before discharge from bankruptcy.

If you’re worried that your old debts will cause problems after the order is discharged, you could try a ‘Subject Access Request‘ to check if your creditors have accurately recorded the information about your case. If not, you might find out they’ve missed off details of long-standing repayments or payments made towards discharging some debts

You can also write to any credit reference agency who may hold inaccurate information on your file and ask them to update their records

Will my bankruptcy affect my spouse?

The bankruptcy of one spouse won’t affect the other. And if it’s your first bankruptcy, you can still apply for credit in future, but it may be harder to get approved as lenders are automatically more cautious about who they lend money to.

But you should consider the consequences if your spouse wants to get a loan in their own name. If they have a poor credit rating, it may be difficult for them to get credit because of the link with you .

In that case, they should write to lenders and tell them about the bankruptcy or other debts from before they were married (if possible) and explain why they need to borrow money

Your bankruptcy will remain on your record until 6 years after discharge and could affect future applications for credit even if it’s not shown on your personal file

Article author

Katy Davies

I am a keen reader and writer and have been helping to write and produce the legal content for the site since the launch.   I studied for a law degree at Manchester University and I use that theoretical experience, as well as my practical experience as a solicitor, to help produce legal content which I hope you find helpful.

Outside of work, I love the snow and am a keen snowboarder.  Most winters you will see me trying to get away for long weekends to the slopes in Switzerland or France.

Email – [email protected]

Frequently Asked Questions

How does bankruptcy work?

Bankruptcy is a legally declared inability or impairment in the ability to pay debts by an insolvent person. This means that you are unable to pay your debt fully and therefore bankruptcy will be declared. Under UK bankruptcy law, people might qualify for bankruptcy under different criteria/rules.

Can I remove a bankruptcy off my credit report?

Yes – the only way to do this is by applying to court and asking for your bankruptcy order to be removed.

Will my bankruptcy affect my spouse?

The bankruptcy of one spouse won’t affect the other. And if it’s your first bankruptcy, you can still apply for credit in future, but it may be harder to get approved as lenders are automatically more cautious about who they lend money to.

How will bankruptcy affect my life?

Bankruptcy will cause you problems when it comes to applying for loans, credit cards and other services in the future. For example, it’s very difficult to get a mortgage if your debts are being paid through bankruptcy. This is because lenders can refuse or cancel your loan while you’re bankrupt.

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