Published in Debt Advice Features on Saturday, December 30 2006

Debts are higher than ever, and there are reports now that on average it could take longer than most peoples life expectancy to clear your debts! This is because people are in low income jobs and with high debts they simply cannot get debt free. Bankruptcy can sometimes be the only viable option, but what if you can’t afford it?

To go bankrupt it will normally cost you 325.00 for the Trustees costs, and ã150.00 to actually file for the bankruptcy, making it a staggering 425.00 to make yourself bankrupt! Now looked at in the long term, this may be better than paying for example ã25,000.00, however it can be a huge amount of cash to raise in a lump sum. You can be made exempt from the Trustees cost if you are on some benefits, or in receipt of Working and Child Tax Credits, but it is worth seeking further advice from the Citizens Advice Bureau regarding this. So it could just cost you 150.00, however more and more often people cannot manage to pay for it, so what are the options?

An Individual Voluntary Arrangement isn’t likely to be an option as payments usually start in and around the ã200.00 mark, which leaves an informal solution such as debt management. However people are entering into debt management, and paying debts at a rate they can afford, but this means they are more likely to shuffle of this mortal coil before being debt free!!

Should you be facing such a predicament it is worth seeking further advice from credit counsellors or the Citizens Advice Bureau.