Confusion over £500 credit limit if bankrupt

longshot

just read the following statement :

For all bankrupts there are restrictions on obtaining credit of more than £500 without disclosing their status


*******
does this mean if you go bankrupt and you have a credit card unused

you can use upto £500 credit?????

sorry can anyone clarify?

skylight

You will not have an unused credit card though. It will be cancelled and closed with your BR and you MUST include it on your BR forms. Everything goes on the forms.

The £500 thing, is for new credit - you must tell them you are BR if you want more than £500 or they offer you a limit of more than £500.

longshot

so who's going to give someone in Bankruptcy a 500 quid credit??????

are there any examples of Bankruptcy cases online? the outcome

for situations? who haas gotten a BRO?????

would someone with straighforward debts ie from cost of living around

30k get a BRO??

skylight

longshot wrote: »

so who's going to give someone in Bankruptcy a 500 quid credit?????? Thats the whole point really!

are there any examples of Bankruptcy cases online? the outcome No. What do you mean??

for situations? who haas gotten a BRO????? Generally used for gamblers, those who defy the OR, and those that do not co-operate.

would someone with straighforward debts ie from cost of living around

30k get a BRO?? Highly unlikely - but each case is dealt with on its own merit.

Hope that helps a bit.

longshot

would they see **** pounds invested into a house for refurbishing

as a bad thing? (over 2 years ago)

debtinfo

longshot wrote: »

so who's going to give someone in Bankruptcy a 500 quid credit??????

are there any examples of Bankruptcy cases online? the outcome

for situations? who haas gotten a BRO?????

would someone with straighforward debts ie from cost of living around

30k get a BRO??

Hi longshot, the £500 limit is not a problem for most people, situations that it may occur are for instance if your parents lent you some money to get a car for instance. If they know you are bankrupt then they are legaly allowed to do this.

If a person wants to carry on business he might need some credit to get supplies or he may need to sign a contract for a lease or rental that could result in him oweing more than £500 at some point in time so he would have to disclose the bankrupt status. Some people take payment up front in the services market for jobs they couldn't do this if it was more than £500 if not stating they were bankrupt.

The reason it is set at £500 is that many people incur small amounts of credit all the time. Mobile phone contracts, gas/elec paid at the end of the month etc

BRO's

A BRO can be for anything that the OR considers is unreasonable enough.
The most common ones for "normal debts" i.e not a business are Preference payments, transactions at undervalue, gambling, extravagance and NRE (no reasonable expectation or repaying debts when taken out).
presuming that the first four dont apply, to prove NRE you must have been insolvent when the credit was taken out, it must have been a significant amount, and it must have been in a reasonable time frame, ie not 10 years ago, it must be new credit i.e not to pay of other credit (recycling debt) but for an expensive holiday or the like.

hope that clears some things up, only a fraction of people get a BRO and as long as you dont fit into the above catagories then you should be ok

skylight

longshot wrote: »

would they see 10,000 pounds invested into a house for refurbishing

as a bad thing?

Sorry - thanked in error, rather than quote.


Depends entirely on where the £10k came from, who, what, where, when, why, equity now, secured loans etc. Its not a simple answer to a not so simple question.

The OR is more likely to have an interest in getting some of those funds back than issuing a BRO. Unless you did it very recently.

longshot

28 months ago - from a credit card but actually repaid via a remortgage 20 months ago.. - surely not a problem?

debtinfo

is there any reason for the bankruptcy since then, i.e drop in income, seperation from partner, illness etc, could you afford it at the time

longshot

drop in income...some illness, children to pay for etc...

property prices dropping and not letting us sell up to move on....

now unemployed.....

longshot

debtinfo - i think you could ask that question to every person who applies for
Bankruptcy and the answer is right there, thats why they're there....

credit lets people borrow money - no creditor expects a 100% return..

they make money and lose some, simple as that.