Is it possible to get a loan while bankrupt?

fadrus

Actually more specifically an overdraft.

Can an undischarged bankrupt lawfully get a temporary overdraft for a period of a few days? I'm sure even if lawful it might be difficult to convince a bank but I'm really just interested in the possibility rather than the practicality at the moment.

Thanks in advance for any answers.

Alan

**Amy**

Hi

Im not an expert on bankruptcy, might best to try the bankruptcy forum above this one, but i always thought it was illegal to get over a certain amount of credit after you have been made bankrupt.

Again dont take this as gospel

x

**Amy**

Might be a good idea to post on here:

http://forums.moneysavingexpert.com/forumdisplay.html?f=136

rayday2

Even if it was possible these days peoples banks are calling in existing overdrafts so not sure where you stand on getting one while bankrupt. Is there a reason you need cash?

fermi

You can obtain credit if you want, and if the creditor will let you.

However, it is an offence to obtain credit of £500 or more while undischarged without first informing the creditor that you are bankrupt.

Part 1 - Restrictions imposed on bankrupts by insolvency legislation

Obtaining credit whilst undischarged from bankruptcy

If a person subject to a bankruptcy order wishes to obtain credit to the extent of the prescribed amount or more, either alone or jointly with another person, he/she must disclose the fact of his/her bankruptcy (or that his/her estate has been sequestrated in Scotland) to the person from whom he/she seeks to obtain credit [Note 1].The prescribed limit is currently £500 and failure to disclose the fact of his/her bankruptcy will render the bankrupt guilty of an offence. The official receiver should note that, although credit might have been incurred contrary to the law, it is still a valid post-bankruptcy debt for which the bankrupt remains liable.

The £500 limit is a single transaction with one lender, but once the bankrupt has reached or exceeded that £500 limit with one lender and “triggered” the offence, then any other amounts borrowed (i.e. the total debt accumulated by the bankrupt) would need to be taken in to account. For example, if the undischarged bankrupt never borrowed more than £499 from the same lender, he/she would not trigger the offence, but as soon as the credit obtained from one lender reaches £500 or greater (which may comprise accumulated unpaid smaller amounts from the same lender), then all other credit transactions obtained from any lender by the undischarged bankrupt, would be taken in to account in any action taken against the bankrupt, even if in themselves, these other amounts are less than £500.

Obtaining credit is specifically stated to include cases when goods are bailed under hire-purchase agreements and conditional sale agreements and also to include payment made to the bankrupt in advance for the supply of goods or services [Note 2].

fadrus

Thank you all for such useful and quick replies. (I hadn't noticed the other board).

Cheers,

Alan