Before you declare bankruptcy, you should think of an alternative. There are a few good alternatives to bankruptcy, which lack most of the negative effects of it. One of the best alternatives to bankruptcy is an IVA, or an Individual Voluntary Agreement. An IVA is a legally binding agreement between debtor and creditors. It helps you reduce your debts until an amount you can pay in your current financial situation. It is good both for the debtor and the creditors. The former manages to repay his debts without declaring bankruptcy and eventually losing his assets, and is good for the latter because he might get back a bigger part of the lent amount than in case of bankruptcy. Another good alternative is an informal arrangement made between debtor and creditors. It is more difficult than obtaining an IVA, but it is possible. Other alternatives are debt management plans; in this case agencies negotiate on your behalf to get your payments reduced, or an Administration Order, if your debt is less than £5.000. You can see that there are several good alternatives of bankruptcy, which lack the vast majority of its negative effects.

Now let us see if you can get another mortgage after a bankruptcy. Yes, it might be a little harder, because your credit score dropped and you credit history is quite bad, but it is possible. Here are the steps you have to make in order to obtain a new mortgage. Of course, you will have to wait until your bankruptcy is discharged, it usually takes a year, but it might take a shorter period if you ask for it. First, you should get a copy of your credit report; to know exactly what are you dealing with. Have all the derogatory credit items that were charged off in your bankruptcy removed from your credit report. You will see that this is quite a time consuming procedure, but you should wait patiently. If you do not want to do it yourself, you can contact a credit repair agency. Now you should get a credit card which should be reported to all your credit bureaus. The next steps depend entirely on you: in order to avoid any unpleasant situations in the future you should pay all your bills in time, you should have a strong documented rental history, and this document will be asked if you want a mortgage! One of the most important things is not to spend too much! Do not buy a car or go on a luxurious holiday, because you should have some spare money if you really want a new mortgage. So be strong and resist any temptations! If you do all this, you have really good chances to obtain a mortgage, even if you had a bankruptcy in the past.

So you can see that it is possible, you can get back on track even after a bankruptcy. Although it might seem as a good choice at the time, you should try to avoid declaring bankruptcy, because it will make your life a little harder if you want a new mortgage. If you can, try to avoid, but it is not the end of the world if you can not. All it takes is to plan ahead, and in a year you can go for another mortgage. So try to avoid any temptations and do not spend all your money at once, this way you will sooner or later be eligible for a mortgage.