If your debts are so bad that you are going to have to choose one of the three types of insolvency, you know this will wreck your credit rating, but how long will this continue? This article answers this and other you may have about the effect of insolvency on your credit record such as Will you ever be able to get credit again? What about a mortgage? Is bankruptcy worse than an IVA or a DRO for your credit score?
Insolvency and your credit record
All three forms of insolvency are shown on your credit records in a similar way. Initially the start date of the bankruptcy, DRO or IVA is shown in the Public Record section. Later another record showing your discharge from bankruptcy, completion of the DRO or completion of the IVA is added. If you are given a Bankruptcy Restriction Order (which are rare) this is also shown. Here is an example from Experian that shows bankruptcy and discharge from bankruptcy.
After six years it all disappears… or does it?
After six years from the start date, if your insolvency has ended, both the start and the completion records will be deleted from your credit file and a future lender will not be able to tell you have been insolvent.
Your debts should have been marked as defaulted on or before the start on your insolvency – these will disappear six years after the default date, so by the time your insolvency marker goes, the debts will also drop off.
So there will be no trace of your insolvency left after six years, with four exceptions.
- an IVA will not disappear until six years has passed AND a completion certificate has been issued. This can be more than six years from the start date, for example if another year of payments was added because you couldn’t release equity in the fifth year, or you had payment breaks;
- the very rare occurrence of a long bankruptcy restriction order which in still in place after the six year point;
- the problem where a debt has the wrong default date marked – see below for how to get this corrected;
- lenders can keep their own records for as long as they want. So if a debt to NatWest was included in your IVA or bankruptcy and you later apply to them for a loan you may still be turned down even if your credit record looks “clean”.
One situation you may think is an exception isn’t. If you settle your IVA early, even if you repay all your creditors in full, the IVA marker will remain on your credit records for the full six years and during this time you will be unable to get a mortgage.
Starting to repair your credit rating
The main thing that will repair your credit record is time – waiting until the six year point is passed. But before then you can start the process of repair by making sure all the default dates are correct. See the following articles on credit repair, the process is exactly the same for bankruptcy, IVAs and DROs but there is a separate article for each as the details about the dates and the exact wording of the letters is different:
- clean up your credit record after bankruptcy
- clean your credit record after a DRO
- clean up your credit record after an IVA.
Those articles also covers applying for a “bad credit” credit card to start getting some good repayment markers on your credit file. If you don’t take out any credit until after the six years ends, you are likely to have a very “thin” credit file, as all the old debts will have gone leaving nothing, which doesn’t look good to a future lender.
Because bankruptcy and DROs end after a year, in practice this means you can start the credit repair process sooner than with an IVA. This isn’t a huge factor though – until the six years is up, your credit score is never going to get to be good.
What about a future mortgage?
A future mortgage lender won’t be able to see your insolvency after it has vanished from your credit file but you may be asked about this on a mortgage application. Some examples:
- “Ever been bankrupt or subject to an IVA?“
- “We will be unable to lend to you if you have been declared bankrupt or entered an IVA.“
Other banks want to know the information but may still consider lending:
- “Lending to a customer with a history of bankruptcy OR who has been the subject of a Debt Relief Order (DRO) or an Individual Voluntary Arrangement (IVA) can be considered provided any bankruptcy, DRO or IVA was registered more than 6 years ago from the date of submission of any mortgage application and no longer shows on the credit reference bureau information.“
There is a common myth that if you go bankrupt you can never get a mortgage… and it is also frequently assumed that an IVA is “better” than bankruptcy for getting a mortgage in the future. But as the above examples show, you are likely to have some problems getting a mortgage after any form of insolvency.
In this situation, you should always go through a mortgage broker, not direct to a mortgage lender even if you are applying several years later and your credit file is back to looking good.
The mortgage deposit problem
Your credit rating isn’t the only thing that matters when you apply for a mortgage. Suppose Mrs A has £25,000 of unsecured debt that she can’t manage and her aims are to clear the debts and then be able to buy a house. She could choose a DMP, an IVA or bankruptcy (she owes too much for a DRO). If she can pay £350 a month then:
- she will make payments to a DMP for 6 years (assuming interest is frozen);
- she will make payments to an IVA for 5 years;
- she will make payments in bankruptcy for 3 years.
If she starts saving the £350 a month when these payments end, after 10 years she will have the following house deposit:
- after a DMP: £16,800
- after an IVA: £21,000
- after bankruptcy: £29,400
So if you were a lender, who would you prefer to lend to? Someone who hasn’t been insolvent at all with a low deposit? You might “prefer” an IVA to bankruptcy, but does the difference in the deposit even this up? A “bad credit” broker is likely to know more about which lenders would be interested given your situation.,
So is one sort of insolvency better or worse for credit ratings?
Not really. The shorter duration of bankruptcy and DROs means that you can start the “credit file repair” process a bit sooner than with an IVA, but it will still take six years until your score can really improve. For mortgages you are likely to have to disclose any type of insolvency.
I suggest that worries about credit ratings and dreams about buying a house in future should come low down on your list of factors when trying to choose how to tackle your debts.
Instead look at the practicalities – how much will you have to pay for how long, what flexibility is there, do you have equity that you need to protect etc. Debt Camel’s Hard Debt Choices page gives direct comparisons of the different debt options.
A jargon-free guide to going bankrupt
What happens in an IVA?
Do you qualify for a Debt Relief Order?
Antony says
Hi there,
I cannot afford the £705 for Bankruptcy; I have no job and no income to opt for an IVA. I do not qualify for a DRO as my debts are over £35k. I have no assets, no property, no car. What would happen if I simply did nothing ? Would it be viable for my creditors to petition for Bankruptcy ? (What would be in it for them). What other options are available to me ?
Thanks. Antony :-(
Sara (Debt Camel) says
Hi Antony, this is a difficult situation – I have looked at your options in this other article: https://debtcamel.co.uk/help-with-bankruptcy-fees/
Jemma says
Hi
My partner has a dro that is 31 months old. He has recently got a credit card to start building up his credit profile. My credit score is good (934) his (437) we have a 25,000 deposit for a mortgage and the house is 80,000. Our joint income is 39,000 and have one dependant and have around £2000 in debts which we pay on time. Will we be declined because of the old dro my partner has?
Sara (Debt Camel) says
Hi Jemma, the DRO will make it harder, but you have such a good deposit and Loan to Income ratio that you may be ok. Talk to a mortgage broker. If broker says “no”, then you will need to talk to a “bad credit” specialist broker.
Your partner should also check that all his debts in the DRO have been correctly recorded and get them corrected if not, see https://debtcamel.co.uk/repair-credit-record-dro/
Sher says
Hi, Just looking for some guidance. I went bankrupt in January 2010. The bankruptcy has now been removed from my credit reports. I still have 2 default accounts showing on 2 of my CR’s but I have written to the credit card company and have asked for the defaults to be removed as they were included in the bankruptcy.
I have an overdraft with my bank which I am reducing each month and hopefully can clear over next month or two. I also have £5k balance on my credit cards. I earn £29k and hope to apply for a mortgage of £90-£100 with a £10k deposit at the end of this year. By that point I wont have an overdraft and I should have reduced my CC balances by at least half.
What are my chances of being accepted? Also once I clear my overdraft should I have the option to have it taken off and same with Credit cards – should I close those accts if I pay them off in full or keep them to show available credit to me? Thanks, this is a really good site.
Sara (Debt Camel) says
Getting the defaults removed from your credit file is essential.
The lower you can get your credit card balances the better. Whether to close is a difficult question, see https://debtcamel.co.uk/close-unused-credit-cards/. If you have say three cards, my inclination would be to clear and close two of them and keep the third open even if it is actually clear.
I am always reluctant to speculate about people’s chance of getting a mortgage in a year’s time. So much can change in the mortgage market! With a 10% deposit, it shouldn’t bee impossible, but talk to a broker as you don’t want to make applications to one of the lenders that will always reject you because of your bankruptcy. If the broker doesn’t seem optimistic, your choices are to wait another year (and hopefully save a larger deposit) or to go to a specialist bad credit broker. A bad credit broker would almost certainly be able to find you a mortgage but it would cost more in fees and may mean a higher mortgage rate.
Barry Thomas says
i had a DRO in september 2013, i was discarged in september 2014 (completed DRO). i recently checked my credit history/score and one of the debts which was included in the dro is showing as account open and defult payment marked every month since september 2013.
can they do that? or should they mark it as closed account, satisfied or something other than default? im facing another 4 years of default payments on my history.
it states on the other page for bankrupsy :
The debts included in your bankruptcy should be marked by the creditors “to show that you no longer owe money on that account (perhaps by marking the entry as ‘partially satisfied’ or ‘partially settled’ or in some other way)” (quote from the Information Commissioner’s Office).
is this correct? can i aproach the company in question and ask them to change it?
Sara (Debt Camel) says
Yes that is right, all your DRO debts should now be marked as closed with zero owing. Use the letters here https://debtcamel.co.uk/repair-credit-record-dro/ to complain!
James j says
Hi Can I ask I have just done a full and final settlement 18 months into my iva. My mortgage deal is up in December will I be able to get a good deal or only go on the standard rate they offer thanks
Sara (Debt Camel) says
The IVA will be on your credit record for another 4 and a half years. If you want a re-mortgage during this time, you will not get a top deal from a high street lender… your options are to go to a bad credit broker or to stick with your lender’s Standard Variable Rate.
Make sure you follow the post-IVA clean up process described here: https://debtcamel.co.uk/repair-credit-record-iva/
claire says
I had a DRO that started in April 2013, and discharged April 2014.
Should the defaults have stopped on the accounts on or up until April 2013, as some have continued to April 2014, which was the end of my DRO. Is this correct? and will they fall off from the date of the first default or the last one??
Thanks.
Sara (Debt Camel) says
Hi Claire, the first default on each debt should be on or before April 2013. After that it is fine for the defaults to continue until April 2014, when each debt should have been marked as closed with a 0 balance showing. Each debt will disappear 6 years after the first default date.
MB says
Hi,
My girlfriend and I are looking to buy our first home and need to start the process of applying for a mortgage. We are looking at houses in the region of 250k and have at least a 50k deposit, combined salary over 50kpa. My credit history is clean, however my girlfriend had a DRO in Jan 2010, this has removed all but one default accounts from her report. The remaining default account has a default date of 19/03/2010 therefore we are hoping this will come off in less than two weeks (no point in writing to them as date is so close). Do you think it is worth waiting until after the 19th to apply for a mortgage, and even though her report will technically then be clean, will this effect our chances of getting top rate deals? If the DRO and all effected accounts have come off the report, do we have to still declare to a lender that she has been ‘bankrupt’ in the past or is it now irrelevant and we can say no?
Thanks
Sara (Debt Camel) says
Definitely wait until the debt has dropped off her credit file before making any mortgage application
You have to answer honestly any questions that you are asked. So if the form asks if either of you has had a DRO or been insolvent at any time you have to say yes. There are firms that will still reject any application because of this, but with a 20% deposit you should be able to get a mortgage. Go through a broker though, not direct to a lender.
Sinead Mackin says
Hi Sara
I have been divorced and unable to get his name off the mortgage despite him signing a transfer deed 7 years ago. I was unable to make the mortgage payments and eventually resorted to an IVA as I was afraid of losing house and it has finished 2 yrs now. I am still unable to get a better mortgage deal or a new mortgage and am now desperate. Repossessed houses in my estate have recently sold for £45,000 and after 10 yrs paying a mortgage of £660 before rates and insurance I still owe £102,000 and don’t know where to turn.
I have since remarried but want to know want the consquences are for both of us.
Desperate
Sinead
Sara (Debt Camel) says
I am sorry but it sounds as though your IVA was a disastrous idea – it would have been better to have gone bankrupt, had the house repossessed and rented… by now your credit rating would be back to good and you could think about buying again.
I think you need debt advice on your full situation and I think this should done jointly with your husband. Although the mortgage debt isn’t his, what your options are now as a fmaily will depend on seeing the complete picture. I suggest you phone National Debtline 0808 808 4000 or go to your local Citizens Advice if you would prefer face-to-face advice.
steve says
Hi, i am currently cleaning up my credit file as i was declared bankrupt in 2011 and released from this in 2012. i found i had defaults with amounts next to them which should have been included in the bankruptcy, these have now been cleared but one of the defaults is for a partial settlement of a second mortgage/secured loan on a house i owned. this is the last default and due to drop off my credit file in October this year, would i be able to get a mortgage or would i have to wait until this has disappeared altogether?
we are looking at borrowing £140,000 and we have a deposit of a £160,000 my wages are £36,000 a year and my partners is £12,000?
any help would be great.
Sara (Debt Camel) says
The remaining default won’t make so much difference because the bankruptcy market will still be on there until 2017. Until that point it’s going to be very hard to get a high street mortgage.
You could go to a bad credit broker, they are pretty expensive but I would be surprised if they can’t get you a mortgage now as your deposit is so large. After the bankruptcy marker goes you will have a wider choice of lenders so it should be cheaper.
Barry says
Hi, I have debts of £20k that I have been paying off in a long DMP that I arranged direct with my creditors. All my debts have default dates around the 3 year mark, so expect to see them clear in 3 years. However, with the amount that I am paying on the DMP, my debts will still outstanding beyond this date.
If I carry on as I am, will my creditors post NEW default dates after the 3 years? I am considering DRO, but I really don’t want ANOTHER 3 years of bad credit after the defaults have cleared.
Regards,
Sara (Debt Camel) says
No, a creditor can’t add a new default date after the 6 year point. But they could take you to court for a CCJ which would wreck your credit record for another 6 years. See https://debtcamel.co.uk/paying-old-debt/
If your DMP will go on for ages you should consider the clean start of a DRO. You will be able to start rebuilding your credit record after a year, it will be slow at the start but you will get there: https://debtcamel.co.uk/repair-credit-record-dro/
gary says
I was declared bankrupt on the 7.4.2011. Discharged after 12 months. In April 2017 I will be applying for a morgage with a 20% deposit.what will my chances be. I also have had 2 credit cards for the last year which i pay off in full each month, will this help my credit score and how much will my credit score increase by after my 6 years are up.
Sara (Debt Camel) says
I assume you have “cleaned up” your credit record so there are no debts left with default dates after you went bankrupt. The two credit cards you are repaying in full every month should mean you end up with a very good score after bankruptcy disappears next April. When you apply for a mortgage, go through a broker not direct to a bank – the broker should know which banks will be prepared to offer you a mortgage – with a 20% deposit you should be OK with the right bank!
gary says
How can i check my credit record has been cleaned up. When i go on to noodle to check my credit score it states i have a bankruptcy but states i have been discharged and no ccjs.
Marta says
I really appreciate this blog! I think that finance should be a subject taught in schools from young age.
I have gone to an IVA last year, after annual review my payments have gone up by £250 which is a lot (originally was £80) I decided to go for an IVA because my husband lost his job and we were desperate to get some comforting news about our debts (£10K in total). I will be graduating soon and really hope to increase my income (at least triple it) and my husband is on training and will double his income soon, which would mean that my IVA payments would be huge! IVA really didn’t work for us as we were unable to work extra hours or save some money… So we asked for termination and decided to pay our debts (creditors agreed).
Can you please advise me if it’s worth to pay off the debts asap or take it slowly (there is no interest on the accounts, they are closed so is all what’s left, creditors happy if we pay whatever suits us) and save a bigger amount so that in 5 yrs time we can ask for mortgage (with a bigger deposit). If we pay it quicker (2 years) what are the chances of obtaining a mortgage with just 10% deposit before the default is deleted?
Sara (Debt Camel) says
An interesting question! I guess your IVA still showing on your credit record?
Marta says
I didn’t completed it, I left after 1 year… The IVA people and my creditors said it will show for another 5 years but if I pay the debts the status on the account will change to ‘satisfied’ so do you think this could improve our credit score? (enough to be accepted for mortgage).
Sara (Debt Camel) says
I think the chance of you getting a mortgage during the remaining years the IVA is showing is very low. And if you did it would be at a very bad rate.
I think you need to plan for having repaid your debts and having as large a deposit as possible by the point the IVA marker disappears. I do suggest repaying the debts as fast as possible because although your creditors may be happy now, they could always sell the debt on to a debt collector. The faster you repay the debts, the less likely this is to happen. Also make sure all the debts have default dates on or before your IVA started, then you will have a clean file at the end.
Marta says
Thank you Sara for your help! After reading your other articles and comments I realised I should have never gone for an IVA.
I will try to settle my debts within a year and I am sure this is not going to do any harm;-)
Thank you for your advise, much appreciated!
Johnny says
Hi, I have a debt of close to £50K across wide range of creditors including Banks, Big CC companies, supplemental companies like (wage day, pay day, etc). Recently i lost my JOb and am NOT in a position to pay minimums and was defaulted by a few creditors as well (lack of min. payments). I have requested money from parents and they agreed to support with some. I don’t think I have CCJ’s. I read this article and peoples’ comments. Very useful. But I do have some basic questions ..
1. Which option is better? IVA or F&F? Why (Current and Future)?
[edited other questions]
Sara (Debt Camel) says
After only a few months looking at an IVA or F&F is premature:
– you have no chance of of an IVA until you have employment;
– there is no way your creditors would accept a low F&F, it is too soon. Perhaps after 3 years!
I have therefore deleted your long list of questions about IVA and F&Fs as they can’t be relevant for you at the moment or in the next few months.
Your only possible full debt solution at the moment would be bankruptcy which seems a bit of an over-reaction to being without a job for 3 months.
I suggest you postpone finding a final solution to your debts until you are in work. In the mean while, contact all your creditors and offer them a token £1 a month, see https://debtcamel.co.uk/token-payment-debt/. And look at whether you can reclaim any PPI or interest on payday loans. Either of these will reduce the amount of debts you have.
tracey says
Hi my partner done a DRO in 2009…. i have a mortgage but now looking for a new one with my partner
we have 50k deposit from the sale of my property and are looking at borrowing 55k
do you think i will have any problems when they do a credit check
Sara (Debt Camel) says
That is a great deposit and it’s beyond the 6 year point for your partner so I hope you won’t have problems.
Your partner needs to check their credit records with all three credit reference agencies . You do too! But it’s most important for your partner to check every trace of the DRO has gone. If any of the DRO debts are still showing, here is how to tackle them: https://debtcamel.co.uk/repair-credit-record-dro/
Also I suggest talking to a mortgage broker not applying direct to a high street bank. There will be lenders happy to give you a mortgage, but it would be bad luck if you pick one that will refuse you because of this old DRO.
Elaine says
After 6 years debt free after a DRO what if say for example you find out an ex partner had been taking out credit fraudulently in your name, but the Police and any companies insist as they are in my name, then I am liable , not him?
Would I be allowed to take out a 2nd DRO please?
I have no means to pay off his debts.
Danny says
Hi Sara
I have been hunting all over for some decent and recent reference info. Your site and answers are really great.
Unfortunately I was made redundant 4 times in a row 2009 -2011. Totally wiped my finances and savings out. I had around 7 defaults and made a voluntary agreement to pay it all back under Scottish DAS. Thankfully 5 years on in 2016 I was debt free again. Trouble is, I have the defaults from 2011 (due to “drop off” Sept 2017. I also have the DAS showing under IVA, also due to drop off Sept 17.
Long and short I want to buy a house. I have a good deposit around the 40%. I have used a credit builder cash card and just taken out my first credit card in years ( a sub prime £1500 limit) but it was a 60 second auto accept full top available limit. This gives me a little confidence dispite having a Very poor credit score.
I’m looking to understand the actual meaning of a default “falling off”. As the accounts show miss payments, even with the default off they may still badly impact my history. Will the account totally be removed or just the defaults. Will I need to wait another 4 years for them all to be old enough not to show up?
I have not missed a payment in 5 years but some accounts that were defaulted continue to show 6/8 late payments consistent. balances all now zero as of may 2016. But up till that point and after default continued to register the late payment. But 100% show a 2011 default date.
All new accounts following my DAS and my mobile phone account have never missed a payment.
I did note your info on mortgage applications to same bank as default. Thankfully my current bank wasn’t affected and now been with them for 6 years.
Any advice would be greatly appreciated
Sara (Debt Camel) says
If a debt has a default date on it, the whole debt will disappear from your credit file 6 years after the default date. It’s not just the default marker that is deleted, it is the debt itself. So your record is going to be completely clean later this year.
bryan says
Hi I have around £60k worth of debt, £32k which was loans from HSBC which have now been passed to collection agency who have’nt been in contact for quite some time regarding this. I aslo owe HMRC £30k in self assessment tax. I would like to try get a mortgage at some point and realise going bankrupt or an iva would hamper this. Would u recomend setting up a payment plan if this is affordable, or going down the bankruptcy route and waiting.
thanks
Sara (Debt Camel) says
That rather depends on how long it will take to repay the debts. Assuming you have spare income to make payments, you would have to make payments in bankruptcy for 3 years.
An IVA may be impossible anyway as HMRC are often a difficult creditor and you owe them so much that they could veto an IVA.
I assume you are self-employed to have got that much tax debt – I suggest you talk to Business Debtline, contact details here: https://debtcamel.co.uk/more-information/where-to-get-help/.
Maria says
I entered an IVA on 28th September 2011 & it’s due to complete 28th Sept 2017 (had to do an extra year as couldn’t release equity in my home). I was single when I started the IVA & am now married. My house is rented out at the moment (as I live elsewhere with my now husband in a private rental). I will once IVA completed on 28th Sept 2017 put my house on the market so I’ve got a clean slate. Next year (Sept 2018) I’ll be looking to buy again with my husband. We will have at least a £50k deposit by the time we’re ready to buy again.
My husband is squeaky clean financially & his credit rating is 999. He earns approx £55k PAYE & I earn £20k PAYE. He refuses point blank to go down the “sub prime” lender route. Will my IVA (although completed in Sept 2017) still show on my credit file as “satisfied/completed” or will there be no trace at all, which means I don’t have to mention it to any lender.
I’m terrified that I’ll be the fly in the ointment, forever stopping us from taking out a joint mortgage with a high street lender. We wouldn’t ever take out a mortgage with a “sub prime” lender (husband refuses to pay the higher interest rates). I feel truly punished for my mistakes & have paid a hefty price for the last 6yrs. I don’t want to constantly declare the completed IVA & be penalised forever for it.
Any advice/help appreciated
Sara (Debt Camel) says
Your IVA will have disappeared from your credit record before you apply in September 2017. BUT you must make sure you don’t apply to any mortgage lender where you had a debt to that bank included in your IVA, as they may still be able to see that on your records.
You must also answer any question on your mortgage application honestly – if you are asked if you have ever been insolvent or had an IVA, the answer is yes.
But you should still be able to get a mortgage from a high street lender at an OK rate. Don’t apply direct, go through a broker and make sure the broker knows about your IVA.
Reece says
Hi, I had a DRO which was revoked due to my increase in income, Do I still have to declare that I had a DRO? (If I apply for a morgage for example)
Sara (Debt Camel) says
Yes. And it will be on your credit record for 6 years anyway.
Rich says
Hi why does it stay on file for 6 years I’m in the same boat. I got revoked because the. Hmrc gave me false figures for my debts. They told me 14k then told insolvency 21k. Completely screwed me over and all I got was an apology from them. But why does it have to stay on a credit file for 6 years when we have gained nothing from it
Sara (Debt Camel) says
It’s the rule. Also applies to IVAs, not just DROs.
But in your case surely the next option for you is bankruptcy… so it will make no difference if the DRO marker stays?
Andy says
My bankruptcy start on 10th January this year. After 10th January 2018 will I get notifyed or anything when I am not bankrupt anymore?
Sara (Debt Camel) says
Only a few months to go! I hope this article will help: https://debtcamel.co.uk/discharged-from-bankruptcy/
Andy says
Thanks Sara, can’t wait for it to be over with so I can start a fresh. It constantly plays on your mind it does
Barry says
I have been advised by CAB to file for bankruptcy for debts in excess of £25k accumulated over the past 5 years while a university student thus not working (none of this debt is student loan). Part of this debt is a £12k credit card however the reason I was allowed such a high credit limit while not even in employment is by lying about my employment status and exaggerating my annual income. I have informed CAB of this but they were vague and unsure of the implications this may have on my bankruptcy a) being accepted, and b) if this might render me liable for a criminal charge for committing fraud? Having read up on the insolvency conditions etc I can see that I may have restrictions added to by bankruptcy which may last longer than the usual 6 years. I can manage this however can you please advise the likelihood of my being charged with fraud or any other criminal offence? I would not file if I thought that this was a risk for fear of it impacting on my employment given the line of work I do.
Sara (Debt Camel) says
See https://debtcamel.co.uk/bankrupt-after-borrowing/.
There really aren’t any clear rules here and no one is going to tell you what the chance is of your getting a BRO. The chance of a prosecution for fraud is a lot less. One option is for you to struggle on for another 6 months or a year before going bankrupt – the further in the past your problems are, the less they matter.
Barry says
Thank you, the info via the link and your advice have been very useful.
Barry says
By the way, I have had this particular credit card debt ($12k) for over 14 months, and around £7
In your opinion would this be considered long enough to have struggled with this debt?
It was never my intention to take so much then bankrupt, I did not even know this was an option until suggested by CAB. There were also specific change in circumstances that lead to my defaulting on repayments.
Thanks
Sara (Debt Camel) says
“I have had this particular credit card debt ($12k) for over 14 months, and around £7” not sure how that sentence was supposed to end?
What were the change in circumstances? If your situation has got a lot worse then it may have been fine for you to take this credit at the time and no problem about a BRO let alone fraud.
cat says
Hi
Is a DRO a bankrupcy?
if asked:
“Have you been declared bankrupt or entered into a voluntary arrangement with a creditor?”
If over 6.5 years has passed and it’s off the credit file, is the answer to the question a yes or a no?
I thought once cleared you do have to declare it.
Sara (Debt Camel) says
I think the answer to that is No …. but I always suggest going to a broker and telling the broker about the DRO – take their advice.
Isin says
Hi I 2 years age applied for a dro .. near the end it came apprent that I owed over the 15k and was revoked.. I then went in to clear all my debts
I am have applied for a mortgage and in the first application was declined due to having a dro .
But as I paid all my debts and the dro was revoked I contacted Experian and Equifax and with proof of the letter confirming the revolke the both removed them from my file …so I have gone back to the mortgage company and they then approved my application in principle and invited me to make a full application of with I have and paid the relivent fees they have again declined it over the dro … i have argued this and it is under review but where do I stand please ?
Sara (Debt Camel) says
If it is rejected, I think yiu have a god case to ask for a return of your fees as the lender was well aware of your circumstances.
Isin says
As it was revoked can I plead that it had no effect as I paid my debts so not actually having the dro?
Sara (Debt Camel) says
Unfortunately, that is not the view that many mortgage lenders will take. All you can do at the moment is cross your fingers and hope this goes through.
Cheryl Hughes says
I had an IVA that was revoked after one month, therefore it was never used to clear any of my debts, is there any way of removing this from my credit history?
I have this and a ccj which was submitted in Dec 2014, this was from a loan that I took out in circa 2007, is there anyway of removing this.
I have no other advertises on my credit score, I even had credit cards now to boost my score, however I cannot even pass a tenant referencing check??
I’ve never missed rent payments or paid late and I have privately rented for 8 years. I feel like this is haunting me :(
Sara (Debt Camel) says
No I am afraid the IVA will remain on your credit record for 6 years, there is no way to get this deleted. There is also the potential problem that you may still get other CCJs for the debts in your IVA unless these have been settled.
Cheryl says
Thanks Sara, these debts are no longer on my credit report as they are now over 6 years old. I appreciate the advice.
Sara (Debt Camel) says
You may still lose a CCJ, which would then be on your credit record for another 6 years.
Andrew says
Hi there
I came out of bankruptcy in January however on my credit file the some of the debt which was included in my bankruptcy still hasnt ‘settled’ it looks like it is still running. Should this be the case or should I call them?
Cheers
Sara (Debt Camel) says
No that doesn’t sound right. See https://debtcamel.co.uk/credit-file-after-bankruptcy/.
Chelsea McMillan says
Hi there I am looking for a bit of advice. I am in a bad situation with debt and I am trying to decide between a DRO or a DMP a debt management plan would take about 10 years to pay off. I am wanting a mortgage in the future (I am 25 just now) and was wondering what option is best. Also how does renting work when on a dro.
Sara (Debt Camel) says
Im going to assume you have talked to a debt adviser who says you meet the DRO criteria.
Do you expect your finances to improve over the next few years? You can’t get mortgage at an OK rate when you are in DMP. So clear ing the debts with a DRO then saving hard for a deposit (hard I know!) over the next 5 years till your credit record is clean may be your best bet.
Re renting is this private or social? Will you need to move soon?
Christopher Wood says
Hi Sarah
I was discharged from bankruptcy in 2017 and 1 year later I came into some property. The bankruptcy was discharged with no extensions and I am now trying to apply for a secured loan on the property. One of the things the loan company wanted was confirmation from the Official Receiver that they had no further interest in me or my estate but when I asked for it the OR has been reluctant to issue a confirmation of this. When I spoke with them they said they wanted to hear from the loan company as they wanted to be sure before signing away their interest. I was under the impression they had no interest after the discharge date have I got this wrong or should I be worried
Sara (Debt Camel) says
Have you asked the OR what information they want from the loan company?
Christopher Wood says
the OR has not requested any information rather the loan company wants the OR to confirm they have no further interest in me or my estate
Sara (Debt Camel) says
You wrote “When I spoke with them they said they wanted to hear from the loan company as they wanted to be sure before signing away their interest”
I assume “them” and “they” are the OR here? So what do they want the loan company to tell them?
Christopher Wood says
Sarah The comment came about after the OR said they wanted to be sure who the loan company was before passing on information about me. She stated that all was contained in the Certificate of Discharge and any mainstream lenders would know that she wanted to have the e mail address of the lender to make sure they were legit before signing away the OR’s interest. I advised her that the discharge was over 2 years ago and the OR in fact has no interest in me or my estate I simply wanted her to confirm this to the lender
Sian says
Hi Sarah not sure if I’m on the right section of your amazing site for this I ramble on anyway. My Dro finished end Jan this year, so happy to have it out the way and such a relief. But Lloyds is still showing that I owe them money on the 3 accounts I had to unfortunately default on. My last credit update with them was end March 2020 and my dro ended end jan 2020. Can they still chase me for the money or do I need to contact them. Bit worried now. Thanks for help in advance
Sara (Debt Camel) says
This article https://debtcamel.co.uk/repair-credit-record-dro/ looks at how to clean up your credit record after a DRO. I will; move your comment there in a day or so.
Do make sure you take a copy of your Insolvency Service record NOW which shows when your DRO finished as this will soon disappear: https://www.insolvencydirect.bis.gov.uk/eiir/IIRMasterPage.asp
With your DRO having ended at end January, now would normally be a time to start chasing up creditors who have not yet marked your debts in the DRO as partially satisfied with zero owing.
But it is highly unlikely you will get chased for money – if you are, you can explain your DRO has ended and that should stop.
And getting your credit record sorted will not increase your credit score.
So it’s up to you if you want to do this now, but you could decide to leave it for 6 months as lloyds is likely to be very busy with coronavirus problems at the moment. That may make it harder to get your complaint looked at quickly.
Sian says
Many thanks for your quick reply. I will leave it as you say, until all this nasty virus thing has settled down a little. Then I shall contact the companies concerned. Thanks again stay safe
Sara (Debt Camel) says
make sure you have that copy of the Insolvency record now though!
Sian says
Just been on the site and printed several copies off 👍 many thanks
Hayley Chandler says
Good afternoon
I was declared bankrupt in 2015 and discharged in 2016. I am now looking to buy my first home with my partner who has no credit issues at all. Should I wait until my 6 years is up before I even attempt to apply for a mortgage? I have since come into some money from my parents passing away so can now afford to pay a good deposit and wondered if that would make a difference? Can I also ask what the best way is of repairing my credit – I’ve heard that applying for a basic credit card and paying it off every month would help but would appreciate confirmation of this. Thank you.
Sara (Debt Camel) says
It will be very hard to get a mortgage now and it will be at a high interest rate. I suggest waiting until next year when the bankruptcy drops off your credit record.
See https://debtcamel.co.uk/credit-file-after-bankruptcy/ for repairing your credit record after bankruptcy.
Jade says
I had a DRO granted the end of last year, the date the DRO ends is 24 December 2020, where I will be discharged. I am due to start a new job next month where I should be able to pay back some money each month to my creditors. I wanted to know that if could afford to start paying my creditors and I contact the insolvency service to let them know this, once I start paying my creditors back, would the mark on my credit file be removed and show as though I never had a DRO? or would the DRO still appear? I’ve not been able to find any information about this so far online, so I wanted to know whether this would be a good thing or whether I’d still have a mark on my file for 6 years? Any help/information would be great! Thank you!
Sara (Debt Camel) says
If you will earn too much so your DRO is ended (the legal term you may hear is “revoked”) the DRO will still remain on your credit record for the rest of the 6 years.
BUT talk to the debt adviser who set your DRO up. If you are currently on benefits, they will be reduced or ended when you start work. And you may pick up new costs eg commute to work costs. So you may not be as much better off as you expect.
Sly says
We started a DMP in 2015. From 2016 we couldn’t afford the installments and went on a token payment up to now. My husband unemployed now, got redundancy payment of 3k. I am a carer for our autistic son. We have more than 50 pounds left per month as son gets DLA. Would we qualify for DRO? We have 18k debt. Would be additional 6years to our existing default date originating in 2015? Or should we make a final offer instead? Max 20% we can afford of the debt. Or bankruptcy perhaps?
Weatherman says
Hi Sly
Firstly, if these are joint debts, you and your husband would both need to apply for *individual* DROs. This means you’d both have to pay the £90 fee.
For a DRO, the income you get from your son’s DLA would be ‘cancelled out’ by an identical amount in your expenditure for disability costs. So you might still be under the £50 disposable income limit. [EDIT this went up to £75 in June 2021]
If you can’t get a DRO you could apply for bankruptcy, but again you’d need to do so individually and pay two lots of £680…
A DRO, IVA, or bankruptcy places a new marker on your credit report, which stays for another six years.
It sounds like you have a few options open to you, so maybe speaking to an advisor at National Debtline would help you work out the best way forward: 0808 808 4000
Hope that helps, and good luck!
Sara (Debt Camel) says
Weatherman has given the figures. As he says, these apply to you individually. So it matters a lot in whose names the debts are in.
Fopr a DRO you have to be renting, not buying.
Anyone whose only income is benefits would meet the “under £75” criteria for a DRO and would not have to make monthly payments in bankruptcy.
This means there are a lot of potential options for you. If you have no income, a DRO may be simplest for you. If your husband then owed less than 18k for debts in his name, he could potentially use the redundancy mony to offer more than 20%.
But do you actually need this redundancy money to live on until he finds another job? And at that point he may no longer qualify for a DRO and it could be cancelled? But yours wouldn’t be as you still only have benefits income.
National Debtline can help you two sort through the options.
But with no income you can rule out an IVA!
Kevin says
I know the answer to this issue, but state it so that other may learn from it. Of course your advice welcomed too…
I entered an IVA with the case heard on 29 November 2019 and was IVA discharged on 17 May 2020. Almost 1 year ago.
I have a CCJ with heard on 6 July 2017. The amount due was settled within the uncontested IVA. The CCJ is therefore unenforceable.
However the CCJ sits on my credit record separate to the IVA.
I therefore had two default entries.
I contend that I should have one, the IVA and the CCJ should now be set aside as it was within the IVA and can not be enforced.
Its very frustrating to be penalised twice, accepting I was obviously involved in the mess.
The IVA was the mature way to reach agreement with creditors as best I could, yet their is no credit gain over a bankruptcy or doing nothing and leaving open CCJs.
I am preparing to seek a £ 250,000 mortgage but have to place a hefty £ 100,000 deposit and pay a 1% premium. I am using a specialist broker and specialist mortgage provider.
I shall when time write to my MP to advise on this double entry and double counting / double penalty to try and seek a legal review re CCJ in IVA.
Thank you
Sara (Debt Camel) says
However the CCJ sits on my credit record separate to the IVA.
I therefore had two default entries.
This is normal – it always happens as there is no way to record that a CCJ has been “settled partiallY” in your IVA. This also happens with DROs and bankruptcy.
The IVA was the mature way to reach agreement with creditors as best I could, yet their is no credit gain over a bankruptcy
Correct. An IVA is no better for your credit record than bankruptcy
or doing nothing and leaving open CCJs.
Well by entering an IVA (or bankruptcy or a DRO) your creditor was unable to enforce the CCJ through bailiffs or a deduction from your wages. So you have gained.
There is no legal reason why the CCJ should be set aside – or at least none that you have mentioned.
The high price you are paying for your mortgage would have happened anyway because of the IVA. It is unlikely the CCJ has made much difference as most mortgage lenders would not consider anyone until 6 years after an IVA has finished.
Kevin Higham says
“There is no legal reason why the CCJ should be set aside” is my point.
I contend it should be set aside, even if partial ( but it’s not enforceable in full, so should be marked satisfied imo)
As its within the IVA it’s unenforceable.
Are any other unenforceable debts recorded ?
I accept no legal reason but would seek a law change.
Sara (Debt Camel) says
Are any other unenforceable debts recorded ?
yes. A debt is unenforceable if the Consumer Credit Act agreement cannot be produced. But it is still reported to the credit reference agencies. The legal case that confirmed this was McGuffick v RBS [2009]
Bertie says
Hi there, I know there hasn’t been a comment on this page for a while, but hoping you might know the answer to a question I have.
I had a DRO approved in 2017 and it was discharged 12 months later in 2018. Since then I have been renting and have gone through referencing and credit checks twice – each time I was upfront about my past adverse credit and was approved.
I am about to move again and wondered what the landlord’s credit check would show. I understand that they can’t see my full credit account history like a lender could, would a DRO still show on it for six years to them, or would it not appear since it was discharged in 2018.
Thanks for your help.
Sara (Debt Camel) says
It shows for 6 years.