The TikTok trend that could haunt your credit for at least six years

A growing number of TikTok videos are promoting bankruptcy as a bold, empowering way to “wipe the slate clean” from credit card debt. Some even describe it as “the best thing they chose to do.“

Over the past month, TikTok searches like “file for bankruptcy yourself” have surged by 600%, with “how to file for bankruptcy” up 92%. Some of the videos seemingly frame bankruptcy as a savvy financial hack, bypassing years of repayments in favour of a clean exit.

At Updraft, we are warning that these viral takes often leave out key consequences, like long-term damage to your credit file, and major obstacles to getting a mortgage for at least six years.

What is the bankruptcy trend?

On TikTok, some creators are calling bankruptcy “the best thing I ever did”, casting it as a clever shortcut to escape credit card debt. These videos often rack up thousands, even millions of views, with creators sharing personal stories of wiping away thousands in debt in one legal move.

And the impact on the app is measurable:

• Searches for “file for bankruptcy yourself” are up 600%

 

• Searches for “how to file for bankruptcy” have jumped 92% in the past month

Aseem Munshi, Our founder at Updraft, experts in helping people pay off credit card debt and build confidence with their consumer credit, comments:

“What we’re seeing is a growing wave of people turning to social platforms to make major financial decisions, often without understanding the long-term implications. This can be particularly concerning especially considering the short-form nature of these videos where there is no time left for the context and consequences of these financial decisions to be thoroughly explained.”

So, what are the real consequences of turning to bankruptcy?

While bankruptcy is a legal option for dealing with certain types of debt, presenting it as a quick fix can be dangerously misleading, especially for people with long-term goals like homeownership or building credit.

In the UK:

• Bankruptcy stays on your credit file for 6 years

 

• Many mainstream mortgage lenders won’t consider applications until the bankruptcy has been removed from the credit file. The more time that has passed since your discharge, the more likely mortgage lenders are to consider your application.

 

• It also becomes a matter of public record, with restrictions on financial activity

Aseem Munshi explains: “The idea of wiping away debt can sound appealing, but it’s not a clean slate. Bankruptcy can delay or limit access to credit products for years, and that’s something we don’t often hear in these viral clips. For those hoping to apply for a mortgage, start a business, or rebuild their credit, bankruptcy may create more roadblocks than relief.”

What are the alternatives?

Bankruptcy may be the right path for some, but it’s typically a last resort. For others, there may be less disruptive ways to manage credit card debt without the long-term damage.

Aseem lists the following as potential alternatives:

“One thing you may think about before turning straight to filing for bankruptcy is to explore debt consolidation to bring multiple credit card balances together into a single repayment with fixed terms. It works differently for everyone, so it’s just one approach people use.

“Low-interest credit alternatives may help too. Some people explore lower-interest loan options instead of higher cost, variable rate credit cards as it can sometimes feel easier to stay on top of a single fixed repayment.

“Using repayment and budgeting tools, such as automatic payment planners or credit monitoring apps, may also help people stay on top of repayments and avoid slipping into further credit card debt, to support smarter decisions and steady progress over time.”

 

Aseem concludes: “While there’s no one-size-fits-all approach, these methods may offer more flexibility for those seeking stability without the lasting impact of bankruptcy. Before following viral advice, it’s worth pausing to ask: what will this mean for my future?”