The effect of Bankruptcy on insurance policies
Bankruptcy could mean you are left without insurance cover particularly if you pay by installments. Insurance companies’ terms usually require that they are notified of yours or a named driver’s bankruptcy. The chance of paying by installments is slim as the insurers will check your credit rating which will show you are bankrupt.
This is particularly relevant if you are running a business and have insurances to cover:
- Public Liability
- Car Insurance
- Professional Indemnity Cover
- General business cover
There are specialist brokers that can help you to find cover while bankrupt but it is likely to come at a price. Most of the insurance policies named above will have insolvency exceptions or clauses that permit the policy to lapse in the event of insolvency.
Getting a new policy during the term of your Bankruptcy could be difficult due to credit checks. Also you can only take on credit of up to £500 without having to tell the provider that you are an undischarged bankrupt.
It is important to review your insurance cover before you go bankrupt. As an alternative to Bankruptcy, you may want to consider an Individual Voluntary Arrangement.
There are sources of free debt advice and services. You can find out more by contacting the Money Advice Service on 0300 500 5000 (8-8 Monday to Friday, 9-1 on Saturday). Alternatively, you can visit their website.
There are sources of free debt advice and services. You can find out more by contacting the Money Advice Service or National Debtline on:
Money Advice Service 0300 500 5000 (8-8 Monday to Friday, 9-1 on Saturday). Alternatively you can visit their website.
National Debtline – 0808 808 4000 (9-8pm Monday to Friday, 9.30-1 on Saturday). Alternatively you can visit their website.