Need help after being refused credit?

You should still be able to apply for a Debt Management Plan if you have a bad credit rating, so long as you still have the appropriate level of income. Your Debt Management Plan will however most likely show up in your credit history for a minimum period of six years and be seen as a negative point by any potential future creditors, making it more difficult for you to get a loan or credit card in the future.

Yes, creditors will generally still offer loans to consolidate the debts of those with bad credit ratings, but will offer loans with either increased interest rates, or, more likely, only offer secured loans whereby your property must be put up as collateral.

Insolvency is the state of being unable to pay off any outstanding debts that you may have or, alternatively, the state of having liabilities that are worth more than your total assets. There are various different ways of declaring insolvency but bankruptcy is probably the most well known.

Bankruptcy is a rather severe form of insolvency that should be treated as a last resort. It is essentially a declaration that you are unable to pay back all of your existing unsecured debts (i.e. debts that are not secured against any of your assets such as credit card debts, rather than something like a mortgage that is secured against your home). Bankruptcy can be declared voluntarily, or you can be forced to declare bankruptcy by a particularly aggressive creditor (or creditors). Once bankruptcy has been declared, responsibility of your relevant assets, as well as the responsibility of communication with your creditors, will be taken on by a trustee; either an official receiver or an insolvency practitioner. While you are bankrupt, you will not be able to work as CEO or director of a company, or manage any business without first letting those you do business with know that you are bankrupt.

While you are bankrupt, you will not be able to borrow more than £500 without first informing the creditor of your bankruptcy. You will also not be able to take out a credit card until you are discharged from your bankruptcy order. Even once you are discharged, you will find it harder to use any form of credit while the bankruptcy order is still noted on your credit report. In such cases, you should consider taking out a specially designed credit building credit card that will allow you to steadily improve your credit score over time.

An individual voluntary arrangement, or IVA, is a form of insolvency that amounts to a legally binding agreement between you and your creditors, via an insolvency practitioner, involving a set repayment plan. An IVA involves settling as much as possible of your unsecured debt by extending the payment term, and reducing the monthly payments. You agree an amount to pay each month, which is then divided up among your creditors. Each IVA case will be managed by an insolvency practitioner, whose responsibility it is to help work out the exact payment plan, to manage the distribution of the payments themselves and to take charge of any liaison with your creditors. Once the IVA is in place, your creditors are no longer permitted to contact you or harass you regarding your payments