Taking credit AFTER bankruptcy but before IPA finishes?

sortingmyshitout
sortingmyshitout Posts: 25 Forumite
edited 14 May 2018 at 1:13PM in Bankruptcy & living with it
I know that during the 12 months of my bankruptcy I'm not able to take more than £500 credit. What happens if I take £5,000 after I've been discharged? Any surplus income has to go to my IPA, so how does that work? Or is the simple fact that I can't (or there's no point) taking any credit before my 36 months are up?

If I can take the credit and keep it, presumably it must then also be acceptable for my SOA to be adjusted to account for the monthly repayments towards the loan?

Essentially I'm stuck in an IPA and hate the idea of not being able to have any luxuries/holidays/etc for THREE years, especially as it looks like my earnings are only going to go up in the near future, but might drop off heavily in the unknown more-distant future. One year is a lot more palatable!

Comments

  • TheGardener
    TheGardener Posts: 3,303 Forumite
    Name Dropper First Anniversary First Post
    Once you are discharged, you are free to take on credit - the tricky bit will be getting it - its pretty tough until the BR disappears off your Credit report 6 years from the BR date. As for paying it back - you would have to economise in other areas of your budgeted SOA to make the repayments. This is completely ok. However, having been BR - is credit really a good idea unless you can pay it off in full each month?
    Try a Vanquis credit builder credit card - but the interest rates are eye-watering.
  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    First Post First Anniversary Combo Breaker
    Hi there


    As long as you have not been given a bankruptcy restriction order (BRO), you are no longer under the restrictions you were during your bankruptcy. In theory it is possible you could try and take out further credit.


    However you need to think about whether it is really a good idea? It's likely you'll find it very difficult to get credit due to the bankruptcy being recorded on your credit file. And affordability checks carried out by a creditor should show them your spare money is being paid into your IPA.


    If you are spending less then you told the OR, or your income increases, all this should be declared so your IPA can be amended. In reality it's unlikely you will be able to take out further credit, but when the IPA finishes things will start to get easier.



    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • TheGardener
    TheGardener Posts: 3,303 Forumite
    Name Dropper First Anniversary First Post
    National_Debtline wrote: »
    ...
    If you are spending less then you told the OR, ... all this should be declared so your IPA can be amended. ...

    Susie
    @natdebtline

    Actually I think we need to be a bit clearer here Susie@natdebtline - if you are making economies within your agreed expenditure on your SOA then no - you absolutely don't need to tell the OR at all! Once your IPA is set its up to you how you spend the money.

    If something significant changes in your circumstances such as no longer having to pay a big thing like rent then maybe - but if we are talking about spending less on food than was agreed so you can save for a weekend away or some fab new shoes then that's absolutely fine.

    Of course if your actual income changes (up or down) you would inform the OR.
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