Bankruptcy is a form of insolvency, in essence a declaration that you are unable to reasonably pay off your existing unsecured debts. It can be either declared voluntarily by yourself or involuntarily by a creditor to whom you owe a lot of money.
Normally an individual is within a bankruptcy for 1 year before being ‘discharged’. During this period, they will not be permitted to borrow money become or stay as a director of a limited company or even own a car worth more than a pre-determined amount.
The benefit of being made bankrupt is that you no longer have to deal with your creditors as any money owed is legally ‘set aside’ with no further action taken against you. It is an immediate release from the worry and burden of making payments to creditors that you can no longer afford.
The downside of Bankruptcy is that your credit file will be affected for at least six years until the removal of the Bankruptcy order and it is unlikely that you will be accepted for any type of credit until you have been discharged for 3 years or more.
Can I get a mortgage with Bankruptcy?
The answer is yes but it will depend on a number of factors.
Certain lenders will never lend to anyone that has had a Bankruptcy even once it has been removed from their credit file. Other lenders will want to know that the Bankruptcy has been removed form the credit file completely before considering an application.
There are lenders who will consider an application whilst it is still on an individual’s credit file. They will expect excellent financial conduct since the Bankruptcy and access to at least a 10% deposit but it is possible.
View Finance have brokers with the knowledge and expertise to advise in this field.
Obtain a credit report
It is essential that our specialist mortgage advisors have access to your credit report. They need to see what any lender is going to see before approaching a lender to perform a credit search. Sometimes there are errors on a credit profile that will result in a decline from a lender. We would recommend using a website such as Check My File as they cross reference the 4 major credit agencies.
What are my next steps?
Simple, once you have obtained a credit report make an enquiry.
View Finance’s specialist mortgage advisors know the ins and outs of obtaining a mortgage after bankruptcy, which lenders to approach and more importantly which lenders not to approach. They will guide you through the application process and ensure that you have the best chance possible of obtaining the right mortgage for your individual circumstances.