Published in Debt Advice Features on Saturday, December 09 2006

You are probably well aware of the disadvantages and you may feel the advantages completely outweigh the disadvantages but please take a look, read over and the get advice.

- You will lose control of all your assets whether they are of significant value or not, the trustee will decide what will happen to them.
- If you have substantial equity in a home you will not see any of it, this will be realised and used to pay off your debts.
- If you own a business this could be closed and your employees (if any) dismissed.
- You can only operate the most basic of bank accounts.
- Utility suppliers may request you make up front payments to your supplies
- If you obtain any sort of credit of over £500 without disclosing your bankruptcy, this includes ordering goods and services such as vehicle insurance can be seen as a criminal offence.
- If you live in rented accommodation nad you became subject to bankruptcy proceedings then this could breach the terms of your tenancy agreement.
- You must allow and co-operate fully with the Trustee when he or she conducts their investigation into your financial affairs leading up to your bankruptcy and after the bankruptcy order.
- You cannot hold certain public offices, such an MP, counsillor or magistrate, practice in certain professions such as a solicitor and a licensed accountant.
- You cannot hold office as a trustee in a charity or act as company director, including taking part in the forming, promoting or managing a limited company without the courts permission.
- You must inform your trustee immediately of any change in circumstances, whether that be an increase in income or win fall etc.
- Certain debts cannot be included in bankruptcy, which means you will still be liable for them such as, Student Loans, any debts relating to the child support act, child maintenance or CSA payments.
- Does not free you from secured debts which means any shortfall due from such creditors after the bankruptcy order was made would be classed as unsecured and you could be liable for.
- Joint debts are not written off unless the other person petitions for bankruptcy, the creditor will seek full claim from the joint applicant.
- If you have been fraudulent or are found to be to blame for your financial position you could find yourself to be bankrupt for 2-15 years through a Bankruptcy Restriction Order.

The largest disadvantage in bankruptcy is the stigma behind it, although bankruptcy should not be ruled out when making your decision about your outstanding unsecured debts, on the flip side it should not be rushed into without exploring other options.