A Free Bankruptcy, IVA And Simple IVA, Insolvency Advice Forum

[itgetsbetter]

Hello

I went bankrupt back in mid 2005 and discharged early 2006; I was 23 going through a divorce and loosing my business that I set up when I was 21,

I was advised by the insolvency practitioner to go bankrupt, as the IVA would not really be an option,

Since going bankrupt and leaving my house and having it repossessed, I still have the debt outstanding on my credit file, it has the account as defaulted and the amount still showing

I was wondering if this is correct as I have spent a year specking with the insolvency practitioner, solicitors, credit expert, and the mortgage company and no one is giving me clear guidelines,

Please would someone be able to advice

Many thanks

[Thomas]

All defaults remain on the credit reference files for 6 years don't they? Or are you saying that the outstanding mortgage and any other charge on the house was repaid in full from proceeds of a sale?

[itgetsbetter]

Hi

Thank you for your reply


Yes, they sold the house but they still have the full amount showing as outstanding

I have complained to them, first they said that the information was incorrect and they are unable to change it, then they changed their minds and sent a second letter saying it is correct.

I my bank still have 2 outstanding amounts on my credit file, they too was included in my bankruptcy , and they are also saying the information is correct, I have forwarded them the evidence to show that they where included but they still refuse to budge

I have contacted solicitors , the insolvency service, no one seems to be quiet sure, I have spoken to the information commission who say that I am correct, but they have a back log off complaints since April to deal with, and it is going to take months to sort the issue out,

I am starting uni in a week’s time and I need a student loan but I cannot get one because off this, I would be grateful if anyone has a few suggestions

[Casa02]

Hi there,

I am just going thru the exercise of contacting all my creditors post bankruptcy to request that they update the credit flles.

What I have requested is the debt is now marked as satisfied, since all debts incurred prior to the bankruptcy, are discharged when you are discharged. I included the discharge certificate with my letter as proof.

To date, I have had various degrees of success, but most have been perfectly polite, and have sent me letters back informing me that they have updated the files. Note, the default status is not removed, but gets a satisfied status placed in the following month, and outstanding balance gets set to zero.

Where I had flats repossessed previously, these were automatically updated as satisfied the moment that the flat was sold. For one of our properties this didn't happen and I wrote a letter of complaint. The status was amended to satisfied the next month.

Sorry a bit long winded, but just trying to show that updating the status to satisfied is the norm, but doesn't seem to happen automatically.

Hope this helps.
Casa

[Thomas]

Hi again IGB

I think there may be some misunderstanding of the situation particularly after reading your remark about being unable to get a student loan.

Whilst bankruptcy wipes out liability for the previous debts and the word 'satisfied' eventually appears on the record, the fact of a default remains on ones credit reference file for 6 years. The reference file is designed to show ones payment/non payment history over a 6 year period in order to enable another potential lender to assess the risk. As I see it, the two main drawbacks of bankruptcy are: (1) The public notice of the bankruptcy and (2) The difficulty in obtaining further credit - in my opinion, the second of these two is the more difficult to cope with, especially for a relatively young person, when the question of further borrowing comes up.

Although the word 'satisfied' may look a positive statement on my own credit file, I know full well (and so do others having access to my credit file) that the lender(s) were far from satisfied but have to use this phrase to show that they can get no further. I dont think it is a phrase that we can use to our advantage when seeking further credit. . I am surprised that another more suitable word (from the lenders' points of view) has not been found..

[itgetsbetter]

Hi
Yes, I see where you are coming from,

The only problem is the mortgage company and one bank are not prepared to change the amount still outstanding to read settled or satisfied

I have wrote and emailed 20 or more letters and produced my letter of discharge about 8 times,

I understand the defaults are on my credit file for 6 years, but I do question what was the point of going bankrupt, if they still show the dept as outstanding

[itgetsbetter]

Hi Thomas

Thank you once again for your reply

To be honest the bankruptcy has not stopped me completely from obtaining credit, as I have a pay as you go mobile, 2 bank account, 2 vehicles and a next account with a limit of £1.500 , I suppose you are wondering why I am moaning on then.

But the fact is because of the outstanding dept of £170.000 is still showing, I am unable to get this career development loan, and it dose slightly annoy me that the information is incorrect

I suppose I cannot grumble really, I should think myself lucky, I will just have to work harder each month and live of beans and toast and cereal to pay the £10.500 for the course for 2 years,

On the bright side, I might just be the only student without dept at the end,

[Thomas]

Hi again IGB

Just a thought.
If the only reason for not getting your student grant is because of that £170 debt not being marked 'satisfied', the decision maker is labouring under the misapprehension that all your other so marked debts HAVE been satisfied in reality (i.e. PAID..) but there is no need to aquaint him/her with the real position..... (It was Napoleon who said "dont disturb your enemy while he is making a mistake" In other words trade on that misinterpretation of the situation).

Therefore, why not start your student course by accepting that you will have to pay, at least in the beginning, and re-apply for a grant as/when the £170 debt HAS been marked 'satisfied' (you can require the lender to do this even if it takes time) and hope that the same decision maker is still there to make the seemingly same mistake.... Its worth a try and I suppose the more distance you put between the bankruptcy and application for the loan, the better, as it will show that you are not rushing into more debt before the dust has even settled and that the loan is for a, hopefully, approved (educational) reason. Bear in mind that the decision maker will not be incurring risk to himself, merely following what he/she perceives as government policy.

[Hg]

It seems to be a grey area where nobody know the answer, but also nobody thinks it's worth the hassle of arguing so they just update the records!

It depends what the records are purporting to show. In one sense yes, you are discharged from liability for the debts on discharge.

On the other hand, that doesn't mean that you didn't default and that they aren't still lying out the money.

[eowyn3]

Firstly as far as I know you can get a student loan when bankrupt.

Also once you've been discharged, your defaults and notice of bankruptcy will remain on your credit file for 6 years.

But the credit reference agency should add that your bankruptcy was discharged on whatever date it was, or in experian's case they use the term satisfied.

As for all your defaults, they should remain on your accoutn for 6 years from date of bankruptcy - but once your creditors know you've been discharged they are supposed to list your balance as satsifed.

[Thomas]

Hi eowyn3

The problem is that the word 'satisfied' doesnt mean that the debt(s) has been repaid and potential lenders know this which is why the student loan people have refused the loan