Bankruptcy will badly affect your credit record for six years. This article looks at what should happen, how to correct any problems, and how to improve your credit rating when you are discharged. Even if you have no intention of getting into debt again, a good credit score makes it easier to rent a house, get a mobile contract and it’s essential if you want a mortgage.
To do a thorough job, check your credit records with all three Credit Reference Agencies, not just one of them.
How bankruptcy should be recorded
After you go bankrupt – check your debts have the right default date
Bankruptcy will be shown in the Public Record section of your credit record. It can sometimes take a few weeks for the entry to appear, but when it does, the date on it will be the date your bankruptcy started.
If it hasn’t already been marked as defaulted when you go bankrupt, an unsecured debt should be marked as defaulted with a default date which is your bankruptcy start date. There will be no change for any debts which have already been marked as defaulted or for CCJs.
The situation with a secured debt such as a mortgage is slightly more complicated:
- if you carry on paying your mortgage and there are no arrears a default should not be recorded;
- if you stopped paying the mortgage before bankruptcy or when you go bankrupt, a default should be recorded with the bankruptcy start date;
- if you initially carried on paying the mortgage after bankruptcy but later stopped, the default date should be the date you went bankrupt, see ICO guidance in 2007 which said
“[paragraph 48] If the customer stops payment at a later stage, the default recorded should show the date of the IVA or bankruptcy and the fact that it was settled only by IVA or bankruptcy…”
When you are discharged
The Insolvency Service will notify the CRAs who will add this to the Public Record section. This doesn’t remove the bankruptcy marker – that will stay on your record for six years.
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).
Six years after you went bankrupt
Everything vanishes and your credit rating will improve significantly!
The bankruptcy marker will drop off your credit record. And all the debts in your bankruptcy will drop off if they had a default date on or before your bankruptcy, as they should have had. CCJs also drop off after 6 years.
Correcting problems
1) Creditor doesn’t use the right default date
Sk the creditor to correct the record. Don’t bother to complain to Experian, Equifax etc about this – they only report what the creditors tell them.
Doing this on the phone can be frustrating as you may be talking to staff who don’t understand what you are saying. Instead complain to the creditor in writing – emial is fine, put COMPLAINT ABOUT CREDIT RECORD as the title. If you write a letter send it Recorded Delivery and keep a copy. For all debts except for mortgage shortfalls, use this template:
I [went bankrupt at xxxxx County Court / had my bankruptcy application approved] on dd/mm/yyyy. I attach a copy of my Bankruptcy Order.
I am writing to ask you to correct my credit file for the above debt. At the moment [there is no default date shown / the default date is shown as dd/mm/yyyy]. This is incorrect and a breach of the ICO guidelines and the Data Protection Act 1998. There should be a default date not later than the start date of my bankruptcy.
Please correct this entry within 28 days or supply me with a written reason why you will not do so.
Recheck your credit file after say six weeks. If it has not been corrected, put in a complaint to the Information Commissioner’s Office here. Attach copies of your letter to the creditor, proof of posting and any reply from the creditor.
2) Problems with mortgage debts
It can be harder to get mortgage lenders to correct a date. If the lender has recorded the default date as being the date your house was repossessed not the date of your bankruptcy, you should include in your letter the quote from the ICO guidance in 2007 that is given above.
However it seems that the ICO is failing to apply its own guidelines with this type of situation. Here are two cases where the Financial Ombudsman has upheld the complaints, applying the rules about dates as they are described in this article: HSBC mortgage case and Platform mortgage case. So I suggest that in this situation if the lender doesn’t correct your record when asked, you should complain to the Financial Ombudsman, not to the ICO.
3) Debt not marked as satisfied after discharge
The creditor doesn’t have to mark the debt as fully settled/satisfied so there is no point in complaining if the debt has been marked as partially settled/satisfied.
But if your debts are still showing as having a balance owing, this needs to be sorted. Ideally you need to get a Certificate of Discharge from the court where you went bankrupt (this costs £70 and £10 for additional copies) however many lenders will accept a copy of the free letter from the official receiver that you may have received. Then send the following letter to the data controller for the creditor:
I [went bankrupt at xxxxx County Court / had my bankruptcy approved] on dd/mm/yyyy. I was discharged on dd/mm/yyyy. I attach a copy of my [Certificate of Discharge/letter of discharge].
I am writing to ask you to correct my credit file for the above debt. The ICO guidelines state that my credit file should show that I no longer owe money on that account, perhaps by marking the entry as ‘partially satisfied’ or ‘partially settled’ or in some other way.
Please correct this entry within 28 days or supply me with a written reason why you will not do so.
Again, complain to the ICO as above if the entry is not corrected.
NB There is one exception here. There is no ‘partially settled’ status for a CCJ and the court only has to mark a CCJ as satisfied if you have paid it in full, which you haven’t. So any CCJs will continue to show as unsatisfied.
Is it worth doing this?
It is definitely worth correcting the dates of default unless they are just a bit late. If these are months late, this delays the time until your credit file is clean as these defaults will still remain after your bankruptcy marker has gone.
Marking your debts as satisfied after discharge is less important. Even if you get this amended, applications for credit, a normal bank account or a mortgage may well be refused whilst bankruptcy is still on your credit file. If you are close to the six-year drop-off, then you could decide to wait and let that clean everything up.
However, getting a debt marked as satisfied will improve your credit rating slightly, which may be enough for you to be approved for a ‘bad credit’ card, see below. It also prevents the debt being ‘sold on’ to another Debt Collector, which is annoying as you have to correspond with yet another person and send them details of your bankruptcy.
Getting positive markers on your credit file
In addition to cleaning out the bad stuff from your credit history, you want to get new, positive credit marks after you are discharged. First make sure you are on the electoral roll, that your address etc are correct on your record, that your bankruptcy discharge is shown and start the clean-up process above. This may take several months to complete if you have to go to the ICO.
Then you have two options.
Get a “bad credit card”
You can apply for either a Vanquis or a Luma credit card. Vanquis is owned by Provident, Luma is owned by Capital One – if you have had debts to either of these firms included in your bankruptcy, I suggest you apply to the other one to maximise your chance of being accepted. If you are refused, double-check your credit file really is clean with all three credit reference agencies and wait six months or so, then apply to the other card.
These two cards are dangerous. They are aimed at people with very bad credit and they charge a very high rate of interest. This doesn’t matter because you should aim to use the card every month and repay it in full every month, so you will never get charged interest!
If you find your balance is creeping up because you are not clearing it in full, then stop spending on the card until it is cleared and have a re-think about budgeting. Your credit rating will not improve faster if you leave a balance on this card – the best thing for your credit rating is to repay it in full each month.
Start saving with LOQBOX
This is a new product where you make regular savings for 12 months but this looks like a loan – so making the savings shows as loan repayment, improving your credit record. At the end of 12 months you have a nest egg saved up and a credit score that is starting to improve. See How does LOQBOX work for details.
This all takes time
If you were expecting discharge from bankruptcy to make an immediate improvement to your credit score, it usually doesn’t… There isn’t a way to speed this up.
The template letters to your creditors here are very likely to work. If they don’t, putting in a complaint to the ICO is the best way to repair your credit.
Never pay any firms offering a ‘repair your credit’ service because either they don’t work at all or will be no better than doing what is described here.
Look out for the problems with “bad credit” cards
Amigo – not a good way to rebuild a credit score
How does discharge from bankruptcy work?
Raja says
Dear Sir/
Will bankruptcy effect on my taxi license? And if i go for bankruptcy and after 1 week i have to go abord in emergency can i go?
Sara (Debt Camel) says
Taxi license – on your application were you ever asked if you had been bankrupt or insolvent? Or was a credit check done? If No and No then you are probably ok, but talk to Business Debtline about this https://www.businessdebtline.org/. The OR can’t make you stay in the country, but if you go abroad you still need to cooperate with the OR.
Raja says
Hi Sara Thank you for your replay no i don’t think they asked for bankruptcy on application form. And they do not check credit file but they asked for CRB
Andy says
I am just after some advice regarding an IVA which I was in and failed in 2011, I initially agreed a repayment plan of £450 a month for 5 years with Payplan in 2009 and kept up to date with regular payments. in 2011 I agreed a 3 month break with them as things were getting on top off me like rent arrears and car repairs. Payplan actually offered me this 3 month break which I gladly agreed to, only to find that they then started pestering me when a new case manager took over my agreement and told me I was behind with payments, she was very bossy and wasn’t interested in the agreed break, I was urged to catch up on missed payments forcing me to give them my whole months salary in August 2011 and they then discharged me when I missed a payment in September. This has always bugged me as I paid them around £10,000 and only a small portion of this went to my creditors. Do you think I would get any compensation if I complained to them.
Sara (Debt Camel) says
I very much doubt it – this is way too long after the event to complain.
Rebecca Francis says
Hello. My husband was discharged from bankruptcy in November 2011. I had to buy the interest in our joint property and restrictions from the Land Registry (B178) in October 2010.
How do I go about a) getting my husband back onto the property and b) restrictions lifted on the land registry. Do I need a letter to confirm the discharge?
Many thanks.
Sara (Debt Camel) says
Do you have a mortgage?
Are you sure the restrictions are still on the property?
Rebecca Francis says
Yes we do and have never deferred on payments.
I have no idea. I don’t know if it automatically gets taken off. This is one of my questions.
Sara (Debt Camel) says
Check the Land Registry entry for your property: https://www.gov.uk/search-property-information-land-registry.
My guess is that the restriction has been removed, your husband’s name is still on the deeds and the mortgage. In which case you don’t need to do anything :)
Rebecca Francis says
Thank you ?
Sara (Debt Camel) says
All ok?
Rebecca Francis says
Just says freehold. Doesn’t name anyone. May ring them on Monday
josie says
Hi Sara,
Thought you might like to know that following an entry for an old debt appearing on my credit report . I rang Link Financial who think I owe them money. It turns out that Co operative credit card have passed them a debt that was settled following my bankruptcy 3 years ago. They now agree that I don’t owe them any money and advised that I am not the only person this has happened. so pleased I have regularly been checking my credit reports. Thanks for your excellent site.
Antony Yates says
I had a debt relief order that ended in August 2017. The debts that were held by Lowell are still showing on credit report . All other debts now say 0 balance. Is this normal?
Sara (Debt Camel) says
Hi Antony – it’s not right. See this article which looks at post-DRO credit records: https://debtcamel.co.uk/repair-credit-record-dro/ and has the template letter you need.
Antony Yates says
Thank you for your reply. I have contacted them hopfully get sorted soon.
Adam says
Hi Sara. Great site! Really useful information that I’ve been looking for. I just wanted to confirm – i have 3 free credit agency reports – Clearscore (Equifax), Noddle (Callcredit) and Moneysavingexpert (Experian). It appears they all get the reports from the 3 major agencies, so I don’t need to sign up directly with them and pay as well to get the credit reports, do I? My other question: I was discharged from bankruptcy in May 2013, it appears on 2 of the reports, but not on the Clearscore one. 5 of my credit card accounts that were part of the bankruptcy show balance, but show last payment around the time of the bankruptcy (one a bit later of July 2012). On Clearscore they show as closed accounts with balance, Noddle show them as open accounts with default dates in 2012. Moneysavingexpert shows them as default accounts with the detail ‘account settled’. Do I need to be concerned with all of these showing the same info, but in a slightly different way? Or is this quite normal, and it appears they should fall off my report around May 2018? Thanks so much in advance and sorry for the long questions!
Sara (Debt Camel) says
“I don’t need to sign up directly with them and pay as well to get the credit reports, do I?” No need to do that.
People are often amazed at how messy and different their credit reports are! If all the debts in your bankruptcy have default dates athat are before or on the date you went bankrupt, then as you say they will all go in May next year.
At this point it hardly seems worth trying to get them all to have zero balances. In theory that makes it easier to get a bad credit card at the moment, but it will take you a couple of months to do it, so is it really worth the hassle?
Adam says
Thanks for the really quick response. Strangely one of the accounts has dates between late June and July 2012 on the various reports, even though the bankruptcy was in May. So should i just assume that one will go a bit later then because of that?
I agree there’s no real need to get the zero balances after this amount of time now- i was more concerned that they were showing in a way that they wouldn’t be removed, but from what you’re saying, apart from the one that has dates after the discharge, the rest will disappear.
Sara (Debt Camel) says
Well it’s up to you if you think it’s worth getting the debt with the wrong date corrected. It’s only one letter so if it was me I probably would try!
Adam says
That’s enough to convince me. Thanks again!
Jen says
Just wanted to say how helpful and clear your site is.
I’m due to be discharged from my bankruptcy at the end of this month (fingers crossed). I’m looking to start my credit file clean up then.
I’m anticipating some difficulty with my mortgage provider of a BTL property, when I have spoke to them they seem to have little understanding of how my bankruptcy impacts this debt.
With this in mind I have been trying to find the ICO guidelines on how they should be recorded, maybe I’m not googling the right thing, could you possibly link me into somewhere that has them set out?
Thanks in advance
Sara (Debt Camel) says
What happened to the BTL? What is currently recorded on your credit record?
Jen says
My friend lived there and only moved out in October so it is only you a few months in arrears. My credit file is showing an arrears for the mortgage but no default.
I was hoping the bank would take possession to give me that fresh start but it seems the joint mortgage holder (we have little contact) has moved someone in.
Is it the case that after I am discharged from my bankruptcy that the bank would need to stop recording a debt on my credit file?
Sara (Debt Camel) says
Is there any equity in the BTL?
Jen says
A very small amount, my share would be less than £2k
Toni says
I’m wanting to clear my bankruptcy early from my credit score. I have 1 year left but am looking into option to get this removed early . Is this possible if so how can I do this
Sara (Debt Camel) says
The only way to get the bankruptcy marker removed early is to have your bankruptcy annulled. This will require you to pay all your bankruptcy debts in full and also the bankruptcy expenses which can be very high. If you have sufficient money for this, I suggest you consult a solicitor who specialises in insolvency.
Anyone offering a “bankruptcy removal service” may well be a scam.
Iain says
Hi
First of all thank you for the previous advice re my fathers will being changed which we have done. I have recently became bankrupt and my question is – can I be added to a credit card as an authorised user. Do I have to let the OR know? This is only to pay for hotels when on a holiday. Many thanks
Iain says
Hi
First of all thank you for the previous advice re my fathers will being changed which we have done. I have recently became bankrupt and my question is – can I be added to a credit card as an authorised user. Do I have to let the OR know? This is only to pay for hotels when on a holiday. Many thanks
Sara (Debt Camel) says
A second card holder on a credit card usually has no liability for the debt, so this wouldn’t be a problem if that is the case.
Sue Ayres says
I went bankrupt on 06/06/2012 and was discharged a year later . Date of order 06/06/2012. Discharge date 06/06/2013
My noddle report has the the debts that were part of the bankruptcy still listed they appear as defaults.
My issue is from one with O2 and two from Lloyds they were all included in the bankruptcy and listed. They are still showing a default balance which is incorrect they should be 0. Lloyds Bank (Was Lloyds Tsb) £ 163 28/02/2018 Default. Account type Current Account. Account start date 29/07/1988. Date of default 06/08/2012. Default balance £ 162.
O2 Uk Limited. £ 269. 01/03/2018 Default. Account start date 13/12/2010. Repayment frequency Monthly. Date of default 20/10/2012
Default balance £ 269.
Lloyds Bank (Was Lloyds Tsb) £ 4,384 28/02/2018 Default. Account type Unsecured Loan. Account start date 01/07/2010
Opening balance £ 6,173. Repayment frequency Monthly. Date of default 29/06/2012. Default balance £ 4,383.
Halfway through the bankruptcy which was a total of 16,500 Lloyds made an additional PPI payout of £8900 into the bankruptcy.
Why are these still listed as default balances, they should be 0 like the others, they were all included in my bankruptcy and will they all drop off this year. I rang Lloyds two years ago and they said the money was not owed but the default would remain on the credit file for the six years. Please explain why they are still listing the loan as defaulted.
Sara (Debt Camel) says
“Please explain why they are still listing the loan as defaulted.” Because they are being too lazy to look at what you are saying and correct the credit records. Send them the letter in the post above and take the complaint to the Ombudsman if they don’t sort it out.
But the debts will drop off your record in 6 August, 20 September, and 29 June this year, so you may decide you don’t care that much.
John Reid says
Does my bankruptcy come off my credit score 6 years after the court date, where I was declared bankrupt, or 6 years after the date satisfied, which is a year after the court date.
Many Thanks
Sara (Debt Camel) says
After the court date.
Hayley says
I have virtually the same problem. I was declared bankrupt in 2015 and discharged a year later but my credit report still shows my debts as defaulted and the accounts still open. Do I contact the insolvency service, their appointed solicitors or the companies I have the debts with to address this? Can you also advise roughly what I need to tell them. Thank you.
Sara (Debt Camel) says
Your debts should have been marked as defaulted at the start of your bankruptcy and when you were discharged in 2016, they should have been marked as settled or partially settled, with zero owing. That was more than a year ago, plenty of time for them to have updated your credit record but they haven’t.
You should contact your creditors, using the template letter in the article above.
Hayley says
That’s really helpful, thank you for the quick response.
Nicola says
Hi Sara
With GDPR coming into action in May this year, do the templates above still apply as they reference the data protection act? I am having difficulty with woolwich (part of barclays) still showing I have a balance on a mortgage which was part of my bankruptcy in 2012. I challenged them 3 years ago on this, the receiver liaised with them on my behalf to reiterate it was part of my bankruptcy (it was the only reason for it, which is the most annoying part)yet they have still saying they have never received any correspondence from the receiver. It’s like the saddest part of my life that I can’t move on from :(
Sara (Debt Camel) says
Yes the templates are still fine. Complain again and take it to the Financial Ombudsman if they don’t resolve it.
Bob says
Went bankrupt over 2 years ago now discharged but was just randomly looking at my noddle credit file I see there’s 3 administration reviews from Lowell financial whom I did owe money to but was wiped out after going bankrupt so was just wondering what all that is about
Sara (Debt Camel) says
Hard to guess! Administration reviews don’t harm your credit record as other lenders can’t see them at all.
If you are contacted by Lowell (or anyone else) about a pre bankruptcy debt, then of course they need to be told that it was included in your bankruptcy- this applies even if you missed the debt off your bankruptcy application.
Lynsey Dawkins says
Thank you so much for these templates. I’ve had a busy afternoon getting letters typed up and sent to six of the lenders that were all included in my Bankruptcy in 2013. My credit file was still showing I owe them money and the default dates were all dates after the bankruptcy date. Let’s hope they all take notice and get my credit file updated correctly, many thanks Lynsey.
Kerry says
Hi. I was declared bankcrupt in Sept 2013 and discharged in April 2014 as it was straight forward. I have been having a few missed calls from a collection company. I asumed that my discharged was the end of the matter?. I have noticed that on my credit file there are a few closed accounts with balances and some with not. Is this nothing or are they phishing? Thanks
Sara (Debt Camel) says
The article above says what to do with the accounts where there is a balance still showing. Getting these set to zero won’t make a difference to your credit score but it will stop you being chased for the debt or the debt being sold on – even though you aren’t liable for any debts from before your bankruptcy I think this is worth doing to prevent any possible hassle.
If the collection company calling you is one of those showing with a balance, then return their call and tell them when you went bankrupt.
If there is no sign of the debt collector on any of your credit records (check with all three credit reference agencies, see https://debtcamel.co.uk/best-way-to-check-credit-score/) then you could decide to ignore it until they write to you. Or you may prefer to phone up and get it resolved – it’s quite a personal decision.
Kerry says
Hi Sara
Thanks for the quick reply. How would I know where to look for a debt collector in my credit file? I use clear score but is this one accurate ?
Many thanks
Axel says
In my case, after sending the letters as per above, and hearing nothing back, I took the step to raise a complain with Resolver and email the complaints departments of the creditors. I have to say that in almost 80% of the cases (had a list of 18 creditors ) the address for the datacontroller from ICO was not correct or although recorded post reached (all address received the recorded post) them it was not until i raised the Resolver case or sent the email to the complaints departments that someone actually did something about it.
Finally, one thing that will help you with the “difficult” ones, is to ask from the Insolvency Discharge email, to send you a list of your creditors. You can tell them that correcting your credit files some creditors asked for it. They will send you a barcoded official file that you can include with your emails to creditors and they will promptly do the corrections.
One last thing, while the above works, that doesnt mean you should not send the recorded post and keep a copy of what you sent. When you complain, producing the receipts and proof of post to them demonstrates you have already applied an effort and your complain has a basis, even if nobody really got the damn letter. Of course, there may be some that will not care still, so then you will reach for ICO.
Hope that will help some.
Sara (Debt Camel) says
Thanks for such detailed feedback. I will mention Resolver as a way of making these complaints.
Kerry says
Me again!
If my credit file still shows the names of my creditors does this mean my debts have not been sold on. Also how can they do this on closed accounts?
Monique says
Hi Sara
Please could you help me. I was declared bankrupt on 03/05/2013 but the default date shows 03/05/2013 and the date satisfied is showing 03/05/2014. Do I need to contact this creditor to change the date satisfied to 03/05/2013?
Thanking you in advance as I am on a clean up mission as I only have 12 weeks to go before I am out of bankruptcy prison!
Sara (Debt Camel) says
No, it is right that the date satisfies is the date of your discharge. The debt will disappear on 3/5/19 along with the bankruptcy marker – countdown to a clean credit record!
Monique says
Thank you!!!!