DISCHARGED BANKRUPTCY

Car leasing after bankruptcy

Once you have been discharged, leasing is possible. Your bankruptcy stays on your credit file for six years, which is why the mainstream companies keep saying no, and why we exist.

£299 to £399

a month, inc VAT

3 months

rental up front

36 months

road tax included

10,000

miles a year

There are two very different situations here, and almost every page you will find online muddles them.

If your bankruptcy is still running, you cannot do this. While you are an undischarged bankrupt you have to tell a lender you are bankrupt if you borrow £500 or more, and no leasing company is going to take on an agreement worth thousands of pounds in those circumstances. There is no clever way round it, and anyone suggesting otherwise is not doing you a favour.

Once you have been discharged, you can. Bankruptcy in England and Wales is normally discharged automatically after 12 months. From that day you are free to take on credit and a lease again.

If you are not certain which side of that line you are on, check before you apply. The date of your discharge is the only date that matters here.

Discharge does not wipe the record. Your bankruptcy stays on your credit file for six years from the date of the bankruptcy order, not from the date you were discharged. So for five years after you are free of it, the automatic scoring systems the big leasing companies use will still see it and still stop.

That is the frustrating bit. You have done everything you were supposed to do, the bankruptcy is over, and a computer is still holding it against you for another five years.

Nobody reads any further than that. Nobody looks at whether you have been working steadily since, or what is actually left in your account at the end of the month.

Your bank statements are read first. Three months of them, plus a copy of your driving licence. Our lending partner's underwriter reads them himself and works out whether the payments would sit comfortably alongside everything else you pay. Nothing touches your credit file at this stage, so if the answer is no you lose nothing.

The credit check comes second. Only if the first part works. It is a full search and it will be recorded. It will show the bankruptcy, and that is fine, because by that point somebody has already seen that you can afford the car.

A person decides. That is the whole difference. A discharged bankruptcy from four years ago, followed by three years of steady wages, reads very differently to a human being than it does to a scoring system.

Discharge. You need to have been discharged from your bankruptcy. If you are unsure of the date, check it before you apply.

The first three months up front. Somewhere between £900 and £1,200 depending on the car. There is no no-deposit version of this.

Income from work. Employed or self-employed, £1,500 a month minimum after tax. Other regular income counts on top of that.

Payments up to date right now. Nothing in arrears, no bouncing direct debits.

A full UK driving licence, and an address in mainland England or Wales.

Most cars are between £300 and £400 a month, including VAT and road tax for the three years. Delivery and collection are free. Servicing, tyres, MOT and insurance are yours to arrange, and you will need fully comprehensive cover.

Agreements run for 36 months with 10,000 miles a year. At the end you hand the car back. There is no option to buy it.

Ordinary, practical cars. Hatchbacks and small SUVs, two to three years old, with mileage already on them.

When we cannot help

• You have not been discharged yet. Come back when you have. We mean that.
• You cannot cover the first three months up front.
• Your income is from benefits or other sources only, with nothing earned alongside it.
• You are behind on payments right now.
• You drive more than 12,000 miles a year.