Many individuals wrongly believe that declaring bankruptcy would be the easy way out of debt. However it is not the solution that many think it is and there can be many adverse effects that need taking into account. However in certain situation bankruptcy can actually be an ideal solution or may be the only solution suitable for them. If you are considering bankruptcy then you should also consider the alternatives could include an individual voluntary arrangement. You could also consider a debt management plan or a consolidation loan.

If you are in debt that is out of control and you can no longer maintain your outgoings then you need to talk with a specialist advisor. They would be able to answer any debt management questions that you have and help you to make the most suitable choice based on the debts that you have and your personal circumstances.

For now we will look at and compare bankruptcy and the individual voluntary arrangement.

• You could be declared bankrupt by your creditors if you owe at least £750 and you would have no say in the matter.
  Your assets would be at risk and these could include any belongings of value which could be your home, your car, shares and savings
• You would not be able to own your own business and be a company director
  
• The bankruptcy would be listed in your local newspaper so your friends and associates could see it
  
• Fees to initiate bankruptcy can be very expensive
  Certain debts cannot be written off in bankruptcy and these could include child support, court orders and secured debts

• You must have unsecured debt of over £15,000
  
• At least 75% of your creditors would have to agree to receive lower payments each month
  
• An IVA will usually last for 5 years and the payments each month can be high
  Your home could be at risk if the creditors take your assets into account
  
• If you default on the IVA then you could be declared bankrupt
• You would be closely supervised by an insolvency practitioner

• Stress is taken away when it comes to dealing with creditors
  
• You would usually pay lower repayments each month than with an IVA
  
• Creditors have to realise that they have to accept less money than what you actually owe
  
• Once in place very little interest will be paid on your debt
  
• Once discharged from bankruptcy any outstanding debt is written off and creditors cannot come after you for this

• No one will know you have taken an individual voluntary arrangement as they would with bankruptcy
  
• You would still be able to trade and own your own business
  
• You have some choice as to what assets are included which means you could keep your home
  
• The administration costs associated with individual voluntary arrangement are somewhat lower than with bankruptcy
  
• Creditors will generally accept that they will get back less money than what you owe
  
• The restrictions surrounding an individual voluntary arrangement are lower
  
• You would still be able to have a current bank account
  

As you can see there are many pros and cons to be weighed up before jumping in and taking bankruptcy. The above will give you some idea as to which debt solution could be the most suitable for your needs. Always look deeper into each solution and talk over the solution with an advisor before choosing your get out of debt solution.