How has bankruptcy affected you?

[JENZ454]

Hi,
I'm having to go bankrupt as my ex-partner let our mortgage get into debt and when it sells there will be a shortfall. I just have a couple of questions for anyone who has been through bankruptcy. Were your bank accounts immediately froze and were you able to keep them or open one somewhere else? As I have no debt with my banks and am always in credit I'm hoping I will be able to keep them. Also what did you have to do during first year? I've heard any extra money in your bank accounts/savings they would take, is this true or were you allowed some surplus money?
Any help will be much appreciated
Thanks :)

Hi I went bankrupt a few years ago. The process is a bit different now but I think the rules on bank accounts and surplus is the same. I had several current accounts which were frozen, but I'd opened a basic account with the Coop before filing and moved all my direct debits across and that wasn't frozen. I would have a look at the moneysavingexpert bankruptcy boards and ask there if your bank is bankruptcy friendly. I chose the Coop as they were BR friendly at the time (as long as you opened the account before filing). The decision to freeze bank accounts is taken by the bank, not the OR, so it really depends on your bank's policy. Even if your account is frozen, most bankrupts can open a basic account so you shouldn't be without banking services for long.

Yes they will take surplus money if you have an excess. When I went BR I was on benefits and they don't take any benefits money into account as it's seen as the minimum you can live on anyway. But if you have a salary they will ask you to list your income and expenses and take away any difference. It lasts for three years usually. But the expenses can be quite flexible, as they expect you to have reasonable living expenses, e.g. running costs for a basic car, hairdresser, basic mobile contract. Anything in savings will be taken but it would be reasonable to withdraw a lump sum for expenses for the next couple of weeks in case your account gets frozen.

You'll be asked if you've taken advice before being allowed to go BR so make sure you've had advice specifically for your situation from somewhere like CAB or Stepchange.

Going BR was a big step for me, but it has all worked out OK. I'm rebuilding credit now with two credit cards and looking towards buying a house once it's fallen off my credit file in a couple of years.

Many thanks for your message. How soon after were you able to get credit cards to rebuild your credit? Glad it has all worked out for you. Are you confident you will be able to get a mortgage as that is another one of my concerns?

I got my first credit card about six months after discharge (so about 18 months after BR). It will be at the worst rates and lowest credit limits initially - about 55% APR (!) and a limit of £300 (now increased to £3200). But that's fine as I pay it off in full each month. I think I've got a good chance of a mortgage (I've read about others who have got mortgages in similar situations on MSE) but it won't be at the best rates and I will need a specialist broker to find it.

I went BR in 2009 and discharged 6 months later. I also had a Coop account which I opened just before filing so it wasn't frozen.

8 years on my credit scores are all excellent, my Vanquis card which I got after discharge started at £300 and is now at £3000.

I've also just got a mortgage with my husband, BR has taught me to live within my means and credit should be taken as a last resort.

My BR wasn't my fault, my ex-h took £50k of loans in my name and I couldn't afford to pay them back.

Time is what heals your credit report and making sure you pay your bills absolutely on time.

Good luck