If you've been declared bankrupt you're probably wondering what this means for your mortgage, both now and in the future. Here's a quick guide to give you an idea.
When you go bankrupt, your debts are usually either 'discharged' or 'suspended'. This means that you're no longer legally responsible for them. However, any debts that are not discharged - such as student loans or child maintenance payments - still need to be paid.
Financial difficulties can happen to anyone, and if you find yourself in this situation it's important to get expert advice as soon as possible. Having a bankruptcy on your credit file will make it harder to borrow money in the future, but there are still options available. It is important that you seek specialist advice to understand all of your options.
What is bankruptcy?
Bankruptcy is a legal process that provides debt relief for people who are unable to pay their creditors. Once you're declared bankrupt, an official receiver is appointed to manage your finances and property.
Bankruptcy means that you will be relieved of paying most of your debts, but it will have a major impact on your credit rating and you will find it difficult to obtain further credit in the future. There are some debts that are not covered:
- student loans
- maintenance payments and child support payments
- magistrates court fines or payments
- debts you owe because of the personal injury or death of another person
How does bankruptcy affect my mortgage?
If you're declared bankrupt, your home might be sold to help pay off your debts. This will depend on how much equity is in the property, if you are the sole owner, and the amount of debt you owe. The official receiver has 3 years to make the decision to sell your property.
If you're renting, the official receiver will not usually take any action to evict you. However, your landlord may begin eviction proceedings if you fall behind on rent payments.
Can I get a mortgage after bankruptcy?
In the past, getting a mortgage post-bankruptcy was almost unheard of. Having a bankruptcy on your credit file made it very difficult to obtain further credit, even years after the event. The majority of mainstream lenders will not lend to somebody who is bankrupt or has been bankrupt in the past. This is because they are seen as a higher risk.
Now, however, there are specialist bankruptcy mortgage lenders who will consider your application even if you have a bankruptcy on your credit file. These specialist lenders understand that financial difficulties can happen to anyone, and they will take your individual circumstances into account when making a decision.
This is usually after a certain period of time has passed since you've been discharged from bankruptcy (usually 2-5 years) and they will need to show that they have re-established their credit rating. Bad credit mortgages usually have a higher interest rate than standard mortgages, so it's important to compare different deals before you apply.
Post-Bankruptcy Mortgage Advice
Getting a mortgage after bankruptcy can be difficult, but it is not impossible. If you can show that you have re-established your credit and are in a good financial situation, it can be possible.
If you have been through bankruptcy and are now looking to get a mortgage, there are a few things you need to know.
Your credit record
When you apply for a mortgage, lenders will look at your credit history as well as your current financial situation. If you have filed for bankruptcy, this will show up on your credit report and may make it difficult to get a mortgage.
Saving for a deposit
It can be difficult to save for a deposit if you are still paying off debts from your bankruptcy. However, you will need to save as much as possible to give yourself the best chance of getting a mortgage.
The size of the deposit will depend on the lender, but you will typically need a much higher deposit than someone with a good credit history.
Your income and employment
Lenders will also look at your current employment situation and income when assessing your mortgage application. It's important to have a stable job and a good income to increase your chances of being accepted.
Interest rates
Bad credit mortgages usually have higher interest rates than standard mortgages. This is because lenders see you as a higher risk. It's important to compare different deals to make sure you get the best rate possible.
Applying for a mortgage
When you are ready to apply for a mortgage, make sure you provide all the necessary information to the lender. This includes details of your bankruptcy, financial situation, and employment.
Get expert advice
If you're thinking of applying for a mortgage after bankruptcy, we recommend that you seek mortgage advice from a mortgage broker with experience in bankruptcy mortgages. They will be able to search the market for the best deals available and offer you expert guidance on your options. At Echo Finance, our advisors have helped many people with an adverse credit history to get mortgage approval, so please get in touch if you need our help.
Getting approved for a mortgage after bankruptcy can be tricky, but it's not impossible. With expert advice and the right lender, you could be approved for a mortgage post-bankruptcy. We'll help you with your mortgage application to give you the best chance of success.
It's important to remember that you will need to provide a full financial history when you apply for a mortgage, so it's important, to be honest about your situation.
How soon after bankruptcy can I apply for a mortgage?
There are certain lenders who will consider approving an application from somebody who has been discharged from bankruptcy within 12 months, however, this will require a high level of deposit of up to 50% and the interest rates will be high.
If you wait until you've been discharged for 2-5 years, then your chances of being accepted for a mortgage will be much higher. You may still need a larger deposit than somebody with adverse credit (25-35%), and the interest rates will be higher. This is because bankruptcy is seen as a sign that you have previously had difficulty managing your finances, and the lender will want to see that you have re-established your credit rating.
If you're thinking of applying for a mortgage after bankruptcy, we recommend that you seek mortgage advice from a mortgage broker with experience in bad credit mortgage products. They will be able to search the market for the best deals available and offer you expert guidance on your options. At Echo Finance, our advisors have helped many people
Can I apply for government home ownership schemes?
If you've been bankrupt in the past, it is very unlikely that you'll be eligible for any government home ownership schemes. This is because these schemes are usually only available to people who can prove that they're struggling to get on the property ladder.
Who is eligible for a bad credit mortgage?
There are a few basic criteria that you'll need to meet in order to be eligible for a bad credit mortgage:
- You may need a larger deposit than somebody with a good credit history.
- You'll need to provide a full financial history.
- You'll need to show that you have re-established your credit rating.
- You may need a guarantor.
- You may need to pay a higher interest rate than somebody with a good credit history.
If you think you meet the criteria for a bad credit mortgage, then we recommend that you seek advice from a mortgage broker with experience in this area. They will be able to search the market for the best deals available and offer you expert guidance on your options.
At Echo Finance, we have a team of mortgage brokers who are experts in helping people with bad credit get a mortgage. We understand the challenges you face and will work with you to find the best possible solution for your individual circumstances.
Speak to an expert
At Echo Finance, we're a whole of market mortgage advisor which means we can offer truly impartial advice on the best mortgage for you, even if you have adverse credit. We have a team of mortgage advisors who are experts in helping people with adverse credit histories get approved for a mortgage.
If you're thinking of applying for a mortgage after bankruptcy, please get in touch. We'll be able to advise you on the best course of action and offer tailored advice to suit your individual circumstances.
Find your local adviser

Frequently Asked Questions
Below you will find the answers to the questions we hear most often from Echo Finance customers:
A mortgage broker, or a mortgage advisor, is an intermediary who acts as a conduit between an aspiring borrower and a lender. It is their job to provide the mortgage applicant with impartial advice, help them choose the right product and arrange the deal with the lender.
Brokers provide services including advice on which type of mortgage to choose, providing access to exclusive rates through their lender contacts, and application support. Some can offer advice on all areas of the mortgage market, while others specialise in niche fields such as buy-to-let, bad credit, commercial finance, first-time buyers or self-employed borrowers.
People choose to apply for their mortgage through a broker because it can boost their chances of finding the right deal, while saving time and money in the long run.
- Residential mortgages: Everything from fixed-rate to tracker mortgages for first-time buyers, homemovers and remortgage borrowers
- Specialist mortgages: For borrowers who fall outside of standard lending criteria, including people with bad credit, self-employed professionals and more
- Later-life lending: Including advice on equity release, mortgages for pensioners and retirement interest only (RIO) mortgages
- Bridging & Commercial: We have specialist advisors on hand for commercial mortgages, bridging loans, development finance and more
- Insurance & Protection: Including life, home and critical illness cover for families and individuals, as well as landlord and business protection insurance
Echo Finance is regulated by the Financial Conduct Authority and is reviewed annually by an independent compliance company. All of our brokers and advisers hold industry-standard qualifications, such as CeMAP, CeRER and DipMap, where required.
We are committed to providing advice through the channels that best suit your needs. Our brokers can provide advice via phone, email, video and web chat from anywhere in the UK, but we also aim to offer face-to-face appointments for those who request them.
