Does the credit rating be worser if you file for bankruptcy?

Question

If you dont file for bankruptcy but also dont pay the debt is ur credit rating still going to be bad? example: am in debt of £6,000 for 6 years now but have contacted them & keep getting letters, is ma credit bad now? will it be worser if i file for bankruptcy? or same as now? is it worth filing for bankruptcy? shall i just keep ignoring the credit angencies? im not going to get a card , loan or anything like that in the future so shud i just keep ignoring them? but at the moment can i still take a card? as i have file for bankruoptcy but also not got back to the collectors?

Answer 1

your credit rating cannot get worse than bankrupt... but yours will be pretty crap if you keep defaulting on payments...

the easy way to find out is to get a home credit report.

Answer 2

You may not be able to file for bankruptcy unless your debt has reached a certain level.I filed for bankruptcy in 2001 and had to pay an amount for 3 years (£5 per week) which was shared amongst my creditors.You must make sure you have listed all your creditors when you file for bankruptcy otherwise they can still demand the full amount.I should point out that my bankruptcy was under Scottish Law and I'm not 100% sure of the difference between Scottish and English law. The downside is that your credit rating may be bad at the moment but you will not be able to get credit and the bankruptcy is not removed from your credit score for up to 6 years. If you stay in England and are made bankrupt you can apply to HMRC (Inland Revenue) to have a zero tax code which means you wont pay tax for 1 year. I worked for IR a couple of years ago and that was valid then and unless they have changed the rules will still be valid but only if your home address is in England. Obviously you would be better to consult a lawyer or financial advisor before doing anything. Hope this helps

Answer 3

Filing for bankruptcy will impact your credit rating and what financial options will be available to you for 7 years after the date of filing. It is not just as simple however as saying "I'm bankrupt" and ignoring everyone as your assets are subject to seizure at that point in order to pay off what debts you can at which point everyone else then wil have to write off the debt.

Your current credit instruments (credit cards, etc) will have to be cancelled and you will likely have an extremely difficult time getting your credit re-established until the 7 years are up. There are other restrictions as well such as you will not be allowed to hold ownership in or start your own incorporated business.

If you're cash flow position is such that you could, with help, cover your debt obligations and get them back into a R1 / I1 status within a 1 year time frame then you shouldn't consider bankruptcy. You are better to go to a debt counciling service that will help you restructure your debt.

If you're cash flow position is such that there is no way you are going to be able to dig yourself out, then bankruptcy might be the way to go. You are essentially starting all over again with some restrictions.

If you simply do not pay your debts, a creditor can take you to court and if the amount is sufficient they can force you into either paying or bankruptcy. For £6K your cash flow would have to be really dismal with absolutely no prospects for repayment for that to happen however.

FInally --- yes your credit rating will be bad. Debt is normally evaluated on a sliding scale from 0-9. If I remember correctly

0 = Debt Discharge
1 = No Notes to file
3 = Late Payments over 30 days
5 = Late payments over 60 days
7 = Late payments over 90 days
9 = Debt was written off by the lender (i.e. borrower defaulted)

If you are always paying on time with no late payments and meeting the minimum amounts your credit rating should be in good shape. However if you are receiving dunning letters it sounds like you have several 30, 60, and 90 day late payments which will reduce your overall credit score.

If you continue to carry these items they will exist on your credit rating for roughly 5 years (with the exception of an R9 which stays for 7 years) from the date of the last update by the lender. You are far better to get these clears as soon as possible so as to have them drop off your credit report at the earliest possible moment rather than continuing to carry these things forward indefinitely.

Answer 4

If you are not paying back money you borrowed your credit rating will be pretty bad. Have they sent in the bailiffs? Or obtained CCJ (county court judgement?) either way you should see what you can do to resolve the situation. Every-body's circumstances are different, this is not the best place to get detailed advice.
I suggest you go to the citizens advice bureaux (you can find their details in the telephone book)
There is more than one option and they will be able to give you considered advice and contact experts on your behalf.
This is much better than using debt consolidation services as their advice is not impartial (the agencies make money from handling your debt).
Going bankrupt is only a short term solution people think after 7 years they get discharged and that is the end of the matter, but be clear it will follow you around a lot longer than that and can even follow you abroad.

I really recommend that you get advice from someone you can show all the information to who will not judge you as a person but look at the situation and give you advice.

Answer 5

Scotbet is totally wrong I fear. It is only written off - if I recall - if they have not tried to recover it.

If they have it never goes away!

Bankruptcy may not be as bad as you imagine. Basically if you have nothing whatsoever in the way of assets if you petition for your own bankruptcy [which costs a court fee - how idiotic is that?] the court will decide if your debts are written off. If so you get a fresh start but will hopefully never be granted credit nor allowed to get into such a state again.

Clearly they cannot get blood out of a stone!

Answer 6

your credit will suffer if you file for bankruptcy. if i were you i would meet with an attorney and see what they recomend...most attorney give you a free consultation, so it shouldnt cost you anything for some advice...if you have already filed for bankruptcy, your credit can't get worse, but you cant hide from the credit card and loan collectors forever...like I said, consult a lawyer...good luck

Answer 7

Either way, your credit will be affected. I filed bankruptcy and it stayed on my credit for YEARS on end!!!!!!!
If you filed for bankruptcy AND you listed those creditors on your paperwork, it is against the law for them to call you.
You need to answer the phone calls, if you get them and tell them to contact your attorney. That IS TELLING them and if they persist, call your attorney and HE will put a stop to those phone calls. IT IS against the law to be harassed after you have filed.
Granted your credit will be shot for awhile but, you will survive. If I could, I think you'll do the same.
Good Luck

Answer 8

You might wish to try contacting them again. The big money or high-interest ones first. Explain the situation and attempt to negotiate. You may also have the advantage of inexpensive llabor. If you keep bothering them, they may give in just so they do not have to pay someone to talk to you. They may let you reduce payments, or lower interest rates. If you do not wish to do it yourself, you might try a "consumer credit counseling" organization.

http://www.google.com/search?sourceid=navclient&ie=UTF-8&rlz=1T4SUNA_enUS223US223&q=%22credit+counseling%22

Answer 9

Go to Money Matters or Citizens Advice. Get some help to get your creditors off your back - ignoring them won't make them go away!

Answer 10

I cannot read past the word "worser." Sorry. Not a word.