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Although bankruptcy is undoubtedly the last thing that anyone should consider in regards to their finances, recent figures released by financial charity Debt Action show that someone in the UK is declared either insolvent or bankrupt ever 3.69 minutes. That such a high number should even exist speaks volumes about the state of the British economy today, if only because so many people are having to forfeit everything they have to cover their debts. Unfortunately, while many people consider bankruptcy to be the end of their problems due to it seeing almost all of their debts getting written off (with exceptions like student loans or child support payments), it’s actually only the start of a long and rocky road to recovery – especially when it comes to getting further credit in the future.

Having a bankruptcy notice on your credit history is one of the most damaging things that can happen, since it’s essentially a giant red flag to banks, lenders and other credit providers. Although the actual period of bankruptcy can last as little as twelve months, the stain of it can remain on your record for at least six years, with credit blacklisting potentially going on much further than that. As such, it’s near impossible to get a loan or any other kind of credit during this time, not in the least because most lenders won’t touch you if you tell them and not disclosing your bankruptcy is actually a criminal offence.

If all this seems like doom and gloom though, be aware that going bankrupt isn’t a dead end road – although it’s difficult, it is possible to get credit once your bankruptcy has been discharged by the court. The trick is proving to lenders that you can be trusted to pay back the money you’re borrowing and prove responsible with your borrowing. Joining your local credit union and making regular savings can help, since credit unions often offer loans to members who’ve proven to be responsible with their money. You’ll also want to get a copy of your credit report from one of the major credit reference agencies like Experian or Equifax and check it thoroughly to ensure the debts that have been discharged by your bankruptcy are actually noted as such. If they’re not, let the agency know so that a correction can be filed – since this is what lenders will look at when performing a credit check, it’s essential to make sure it’s a fair representation of your current credit status.

Once these steps are done, you can consider applying for credit again. Rather than applying for multiple loans and credit cards, which are likely contributors to going bankrupt in the first place, find one that you can definitely afford the repayments on and stick to it, using the steady monthly payments to start building your credit score back up. Ideally, you should use the services of a reputable loan broker with a wide network of loan companies in its grasp – they’ll be able to analyse your circumstances and recommend the right products for you. It’s best, however, to find one that only charges a fee once you’ve been accepted for a loan, since you don’t want to be paying out for a service that eventually leads to a string of declined applications.

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