Debt Consolidation is not the Only Alternative!
Credit Refusal -
Discharged Bankrupts have many Challenges to Face
Bankruptcy is a difficult
phase, especially with the various associated restrictions to abide by. Borrowers
in such situations, eagerly wait for the same to end and therefore be classified
as discharged bankrupts, which apparently would help them again live a normal
financial life. Instances like credit refusal to discharged bankrupts in UK
however, break the myth. Among the various other issues like self employment,
bad credit history, etc., due to which borrower's face credit refusal, being
discharged bankrupts is another one. To elaborate further on the stated and
suggest ways to prevent the credit refusal woe, a brief outline on discharged
bankrupts and their legal status in UK is elaborated below.
Discharged bankrupts – are you among them?
Discharged bankrupts are the ones, who have cleared all debts, as on the date of
bankruptcy. They are no longer constrained by bankruptcy related restrictions,
unless there are any specific related clauses in the bankruptcy restriction
undertaking. One can be classified among the discharged bankrupts post clearing
all dues or automatically, after completion of a year of bankruptcy date. The
only constraint, as per UK bankruptcy legal norms, could be in case the borrower
is subject to a criminal bankruptcy order or his discharge has been suspended,
due to an official reason.
Discharged bankrupts – what to expect
If you've landed in the category of discharged bankrupts, the first obvious
inference is that there are no more debts to be taken care of. The second is
that there are still are abundant challenges to cater to, including the credit
refusal process, in case of credit requirements. Despite the clearance of all
debts and bankruptcy legalities, taken care of, it is not going to be easy to
get credit at normal terms. In fact many lenders would be wary of the discharged
bankrupts as borrowers and thus might refuse with no serious grounds to validate
the credit refusal decision.
Here it is also pertinent to mention, that the Official receiver, even post the
clearance, will not send any official notification to the credit agencies, thus
further creating an information gap between the two ends. Credit agencies in
such situations, collect information from any and not necessarily every source.
Focus on credit repair
With the outlined in forefront, credit repair remains a task demanding profound
attention from the discharged bankrupts. As discharged bankrupts, it remains
your individual responsibility to clear all reports and thus avoid credit
refusal eventualities. The said can be achieved by adding an elaborate note with
the credit report, outlining the discharged bankrupt's status, or by contacting
the various credit agencies and informing them of cleared debts scenario.
Another possible route to this could be by taking up a small loan and ensuring
regular repayments to improvise on the credit score. While attempting credit
repair, also make it a point to closely scrutinize the credit report for
inconsistencies if any. Inaccurate information reporting is least desired,
especially post categorization among the discharged bankrupt.