what happens after discharge?

miserableindebt

well i cant believe its a year since I first came here and looking forward now to our automatic discharge date of 11 may 2008.:beer:

What happens once discharge? How long is it on our credit file? How long before we can get another mortgage (cant believe im asking that question, but our rent is very high)

any advice greatly appreciated.

Walter_J

The figure normally given is six years but I don't know for sure - I'll find out in four and a half years time!

I would completely forget about getting a mortgage for the forseeable future for several reasons;

1. House prices have started to fall. According to Rightmove the other day vendors are having to accept offers 10% below the level achievable last summer in order to get a sale. History shows that once house prices start falling they will continue to do so for several years. Total falls of 30-40% from last year's peak are now predicted by many experts. Buying a house now is a sure fire route to bankruptcy!

2. Even people with a squeaky clean credit file are finding it difficult to get a mortgage now. Lenders are insisting on a deposit of at least 10%, and in many cases 20% for house purchases. You are just coming out of bankruptcy - where are you going to find 15 - 30 thousand pounds in cash? Except that because you are a high risk the'll want nearer a 50% deposit plus charging an extra high rate of interest- if they even look at you at all. Totally impossible.

3. Rents are cheaper! Have a look at an average house in your area. Where I live that would mean around £200k. That means interest only mortgage payments at 6% of £1000 per month for a now-extinct 100% mortgage.

The rent you would have to pay for an equivelent property however, would be around £650 per month! The other advantage of renting is that your costs end with the rent. If the boiler breaks down you just phone the landlord. This has got to be an unseen saving of at least £100 per month over the cost of home ownership.

My advice would be to forget completely about your credit file for the next few years. It was debt that got you into bankruptcy in the first place - but now you are debt-free. Enjoy it and savour it. People around you are slaves to their debts, and the situation is going to get worse as the economy slows; we may well be entering a recession. You are one of the lucky ones.

Work like mad for the next few years and save up as much as you can - £400-£500 per month. Do not spend any money! Live within your means and be happy.

Then, in 5 or 6 years time, when house prices are much lower, and you have a decent deposit saved up, you can maybe start thinking of buying a house again.

sammahootexpress

good advice but save 400 500 blimey

Walter_J

sammahootexpress wrote: »

good advice but save 400 500 blimey

Yeah, its a lot - but that's what they're saving by renting rather than paying a mortgage!

And without debts, it's possible to live very cheaply.

wherediditallgo

sammahootexpress wrote: »

good advice but save 400 500 blimey

It is a lot, but when you've gone BR it really is possible to save some money regularly - how much does depend on other expenses though (eg renting in a cheaper area may mean higher travel costs to get to work). It's not just because you're not paying debts any more. It's also because you're so much more aware of your spending that you spend less. Initially that happens because you're conscious of every penny, but after a while it's something you do without even realising it.

There are things that pre-BR I "had" to have, yet I haven't bought them in months & don't even think about them now. Shopping that would actually get bought almost automatically has (mostly) been exchanged for things that are more likely to be eaten before they go off, & I definitely don't go hungry. I don't buy clothes I don't need or spend loads on them, but neither do I feel sub-human if I don't buy something for myself for a few weeks, & I don't feel I have to go without something I genuinely need. If I want a weekend away, I can do it, but only because I make a point of looking at length for the cheaper deals rather than just paying for the first or second thing I see with credit. All that reassessment of how I spend results in more money for the savings pot.

tigerfeet2006

Another thing to do is make sure your credit files are in order. See Fermi's excellent post on how to do this.

http://forums.moneysavingexpert.com/showthread.html?t=677875

sammahootexpress

i only save that much in the height of the summer when every one is on holiday at work, as u say now br u get better at saving iv got more than i ever had , iv got obsession of petrol seeing how many times i dont fill up in a month , only using the caron nessacery journeys.:T

Wherehasmymoneygone

Sort your credit files out AS SOON AS POSSIBLE once you are discharged - I had all my letters ready and sent everything recorded delivery, it does cost a little more but they can not say they didnt get it. If they dont do it keep writing to them until they do! I did and it worked. Everything was corrected on my credit files within 3 months.

FYI - You can get a mortgage once discharged. I put down a 10% deposit and got a house the same year as I was discharged.

I bought with my husband who sold his car to fund the deposit and some help from both parents.... our mortgage is 6% which is more than most pay but it was always going to be the case with the Bankruptcy history.

Toon_Dave

sammahootexpress wrote: »

i only save that much in the height of the summer when every one is on holiday at work, as u say now br u get better at saving iv got more than i ever had , iv got obsession of petrol seeing how many times i dont fill up in a month , only using the caron nessacery journeys.:T

HI,

my post isnt really for this thread but just follows on from your post ref petrol etc. I have a company car so really i shouldnt worry about fuel etc as paid for..which is great, However i still always try to fill up using the dial-card at morrisons using there miles card, so eventually i get a £5.00 shopping voucher FOC as i havnt had to payfor fuel in first instance.

Then i sometimes use this voucher for lunches etc, i can claim these for expenses some times so i get cash returned to me..True free money.

Just thought it may be a useful post for anyone in similar situation. I can post it elsewhere if needed.

Dave.

direstraites

Totally off topic but if you can use the company card and fill up at shell you can save up driver rewards,when i was working i was getting £30+ every three months in argos vouchers :beer:

Toon_Dave

Cheers DS, i'll have to look into that and see if i've any shell garages near me...The fuel card can be used at most outlets and i think i'll still get the rewards too.

But, i may then be tempted with ARGOS!!....lol...i'll try and resist spending too much....lol...cataloges etc..

Thanks though.
Dave.