Historically bankruptcy has been seen as the last resort of Debt Management, with other debt management solutions such as debt management plans and IVAs been seen as preferable with many Debt Management Companies.
Though there are potential problems with bankruptcy, there are also great benefits;
Bankruptcy is by far the most effective of the debt solutions as all your debts are wiped out, whatever the level of debt. Other debt Management Products only remove part of your debt and some actually remove none of it.
It is the shortest time wise, bankruptcy usually takes a year. An IVA has a 5 year term and a Debt management plan can significantly increase the amount of time you are in debt.
The Costs of bankruptcy are also lower compared to other options. To go bankrupt you will pay the court fees, and usually a one off charge to debt Company that helps you through the process. However both IVAs and debt management plans have ongoing monthly fees. On a positive note understand that even with the fees debt management solutions leave you with more money every month each week, and reduce you total payments.
These benefits of bankruptcy need to weighed against the downsides which are that there is no protection for your property and assets which creditors will probably ask you to sell in order to pay your debts.
