Is Bankruptcy the Right Choice for Me?

Some people believe that bankruptcy offers an easy way to get out of paying their debts, and in many ways it does. If you are declared bankrupt then a large proportion of your debts will be wiped out, which differs from the IVA where you will still be required to pay back a large amount of your debt.

However, bankruptcy should always be considered a last resort. The long-term implications of going bankrupt will stay with you for many years, and there is also a social stigma attached to it. One thing that puts people off going down the bankruptcy route is the need to declare themselves bankrupt for certain transactions in the future, which can often be a cause of embarrassment.

But perhaps the worst aspect of bankruptcy is the loss of control it gives you over your assets. This is especially true for homeowners, who will not have any control over their property once they have been declared bankrupt. This can create feelings of frustration and can be very hard to accept.

As well as losing control over your assets, you may also feel that bankruptcy affects your privacy. Bankruptcy is not a private arrangement, and on top of other people knowing your financial affairs you will have to provide details to the official receiver of all your financial history, which may feel invasive.

Other options, such as an IVA, may be a better course of action for you if you are considering going bankrupt. This will provide you with a greater degree of control over your assets, as well as granting you more privacy and the ability to write off a large amount of debt. Essentially, you should think very carefully about all the other possibilities before filing for bankruptcy, and you should think long and hard about what it will mean for your future.

Having said that, for some people bankruptcy does provide the best option. If you have a large amount of debt that you owe to a number of different creditors, and you simply can’t afford to pay any of it back, then the ability to free yourself from debt and start over again can provide relief for many people. When it gets to the stage where you are suffering emotionally because of the large sums of debt that you owe, and you are simply unable to make enough in monthly payments, then it could be time to consider filing for bankruptcy.

There are no exact specifications for going bankrupt, and you do not have to owe money to a certain amount of creditors or have a specific amount of debt in order to qualify. Every case is unique, and your individual case will be scrutinised closely to see if you should be declared bankrupt. What you have to remember is that you should always seek professional advice from a debt agency or charity before making the decision, as they will be able to examine your personal situation and inform you whether it is the best option for you.