Bankruptcy and Insurance


If you have a previous bankruptcy and are looking for insurance for your car, home or business, SIS (Sale Insurance Services Ltd) can help.  

We are an experienced team of brokers, dedicated to providing specialist insurance quotes to people with a previous bankruptcy.  Contact us today.  We strongly believe that your past should not necessarily be a guide to your future.
 


What happens when I declare myself bankrupt?

Bankruptcy must be declared by a court, with a hearing in which you must explain the reasons for your debt. Non-essential items for your everyday life will be sold to pay off your debts, for example property and other luxury possessions, the costs are generally around £500. Unless your income is seen to be high enough to make on going monthly payments, any remaining debts will be cleared.

Bankruptcy usually lasts one year, however if you are paying off your debts monthly payments can continue up to 3 years. During this first year you will be known as an undischarged bankrupt, financial organisations are able to see this information for up to 6 years as it will be noted on your credit file. This could consequently affect whether they decide to keep you as a customer or not.


Bankruptcy and car insurance

You may find that once you have been declared bankrupt, insurance for your car, home or business may be more difficult to come by.  Regardless of bankruptcy, car insurance is a necessity unless you have declared your vehicle as SORN.  Many companies refuse to provide car insurance if you have a bankruptcy.  Here at SIS we do not believe this should be the case.  If you have been made bankrupt, car insurance IS possible.  Contact us today on 0161 969 6040.

Insurance providers often state that if the policyholder, their spouse or anyone linked to the policy has a previous bankruptcy, insurance companies must be informed immediately. These terms and conditions may stop anyone formerly bankrupt from getting insured, and paying monthly could also prove difficult as the company will discover your bankruptcy when they conduct a credit check.


Bankruptcy and household insurance

If you’re a homeowner you will have to sell your home to pay off debts and live in rented accommodation. However, you may struggle to find rented accommodation as most estate agents will only accept you as a tenant if a financially-stable family member or friend can act as a guarantor.  If you are struggling to obtain insurance for your home and contents, contact SIS today on 0161 969 6040.  We can help.


Bankruptcy and banking

Unsuprisingly bankrupts do not qualify for personal loans or credit cards, however during the year that you are declared as a bankrupt you won’t have access to a standard current account that offers a cheque book or overdraft facility. Repercussions of not having a bank account include the inability to make direct debit payments for household bills, or receive your salary direct to your account. Barclays and The Co-operative Bank do however offer a basic bank account that enables you to make cash withdrawals (providing you have the amount in your account) and pay bills by direct debit. These basic bank accounts were introduced in 2003 by the government to provide a solution for bankrupts and other people unable to obtain a standard current account. 

There is a specialist debt advisory service from Think Money which offers advice along with a basic account, although there is a £12.95 a month fee which most likely wouldn’t appeal to people with financial difficulties. However, this isn’t a regular account and you are provided with a money manager that helps you work out monthly costs to cover your outgoings, and the remainder of your money goes into a card account that’s accessible at any time using your debit card. 

Once your bankruptcy is discharged it is likely you will struggle to get credit for the following five years as it remains on your credit file. It will also be difficult to find a bank that allows you to open a current account. FLM Loans lend £500-£3,000 at a typical rate of 42.6%, to anyone with a family member or friend that’s a homeowner guarantor.


Bankruptcy: You are not alone

Bankruptcy is a drastic measure that is becoming more common, as the recession pushes more people towards this as a last resort. 19,000 bankruptcies were declared in the second quarter of 2009 which is a 15% rise from the same period the previous year, along with statistics revealing that around 3.4 million UK adults have severe debt problems.

You can either be forced into bankruptcy by your creditors or alternatively declare yourself bankrupt. If you’re in more than £750 debt to one company, they are entitled to apply for you to be bankrupt. However it is only advised that people with more than £50,000 of unsecured debts declare bankruptcy.

Bankruptcy isn’t the only option, if your debts are less than this you can apply for an Individual Voluntary Arrangement (IVA) or Debt Relief Order (DRO) instead.


Bankruptcy and obtaining insurance policies

If you have been declared bankrupt and are struggling to find insurance for your car, home or business, call SIS today on 0161 969 6040.  We can help you get the insurance that you need to get on with your life.

 

 

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