If you have a huge amount of debt that you’re struggling to pay off, then you might be offered the option to declare yourself bankrupt. However, this can have consequences for your future and should only be considered as the last option.
By making yourself bankrupt you aren’t necessarily cancelling your debts and they could be taken from your salary. Being bankrupt has severe consequences on your credit score and you may find that you aren’t able to access any credit in the future, as it will be black mark on your credit history. You may also not be eligible to apply for the best deals on credit cards and further finance. Other consequences of going bankrupt could mean that bailiffs could cease your property to help pay the bill off and you could lose your home even if you rent it.
You may also find that some employers won’t employ people who have been been declared bankrupt. You may not be able to start a business either if it’s on your file and as bankrupts are published publicly, others will know about your debt.
If bankruptcy is being forced upon you because you owe a lot of money then it’s worth talking to them in order to create a payment plan as going down the bankruptcy route is not as plain sailing as some offers may sound and the consequences could stay with you for a long time.
The Money and Pensions Service have created Money Helper so that you can access free advice, which includes local places where you can get further help and guidance.
