Bankruptcy & Loans

If you have been declared bankrupt do not automatically assume that you will not be able to get a loan in the future. Although bankruptcy stays on your credit report for several years, it will not necessarily prevent you from gaining credit again; some lenders even specialise in dealing with people who have been made bankrupt or who have poor credit ratings. It will however be more difficult to get a loan on favourable terms: this means you can expect higher interest rates and perhaps stricter repayment terms than someone with good credit. The amount you are able to borrow is also typically restricted.

Loans are more difficult to obtain for people who were bankrupt in the past, or are currently bankrupt; this is not meant to punish people, only to prevent them falling into more debt. If you have been refused for a loan based on your poor credit report, consider whether a loan really is the best solution for your financial needs. It is difficult to survive with limited funds, but it is also difficult to cope when you are in debt and cannot meet repayments.

You may find it useful to get some advice from an independent financial advisor before applying for more credit, for example from a debt charity such as the National Debtline, or from the Citizens Advice Bureau. They will be able to help you establish whether or not getting further credit is the best course of action for you, advise you on potential loans, and advise you on how to avoid getting into debt again if you do take out a personal loan.