Bankruptcy more acceptable but still risky

The number of  bad credit remortgages has risen sharply of late, but homeowners looking for a solution to their debt option have been warned to think twice about declaring themselves bankrupt.

Debt consultancy Thomas Charles has said that while bankruptcy is becoming more socially acceptable, it carries with it an increased risk of repossession.

The firm also noted that borrowers should be aware that they will be labeled as bankrupt for a minimum of 12 months.

"The bankruptcy option will, I think, become more and more palatable to people. I do agree that the stigma surrounding bankruptcy is becoming less and less," said Thomas Charles managing director James Falla.

"I think that's absolutely the case. I think the stigma around debt, to be honest, is becoming less and less. Certainly in the last two years. Buy a new sofa on credit and nobody blinks an eyelid.

"The one key thing with the bankruptcy … is that it is of key importance to homeowners to understand that if they declare bankruptcy, there is a high risk that … it is more difficult to keep hold of your home if you declare bankruptcy than with the other two solutions," Mr Falla cautioned.

Have you been refused a loan due to bankruptcy? We can help arrange a mortgage or remortgage, even if you are a discharged bankrupt. Submit your details here

The Mortgage Provider Online