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Bankruptcy - Advantages and Disadvantages

It is important that you are fully aware of both the benefits, and the negatives, of declaring bankruptcy. We will talk you through everything fully when we speak to you, but please feel free to read our guide to the advantages and disadvantages of bankruptcy.


  • For many, there is a great relief and a release of pressure and stress by no longer having to deal direct with creditors.
  • Whilst there may be a misconception that bankruptcy results in the loss of all possessions, it is possible to retain certain things, including household items, so that an acceptable standard of living can be maintained.
  • The process allows for a fresh start. The bankruptcy is usually discharged after twelve months, when the individual can truly begin to move on.
  • The debts you carry can usually be written off, at least partially.
  • Creditors usually have to halt any court actions against an individual once a bankruptcy order is made.
  • The stigma involved is not what it was. Approximately 40,000 people in England and Wales go bankrupt each year. Bankruptcy should be seen as a responsible course of action to deal with debts definitively if all other avenues have been exhausted.


  • Bankruptcy restricts your ability to apply for more credit.
  • You may lose many of your other possessions, which can be sold to help pay off creditors. This would include any motor vehicle you may possess.
  • A small number of professions may not continue to employ those made bankrupt. Solicitors and accountants are two such professions. You would also not be allowed the role of school governor.
  • Business owners may see their firm closed down as part of the bankruptcy process.
  • Bankruptcy is a public process, listed on the Insolvency Register. You will be removed from this register three months after being discharged.
  • Even when no longer bankrupt, some debts cannot be written off – these include student loans and court fines for example.
Free debt counselling and advice is also available from the Money Advice Service available at: doesn't charge a fee for its bankruptcy service, but receives remuneration from the partners that we work with in order to keep operating. Those partners must charge a fee to the customer to likewise cover operational costs, and this amount will vary depending on the solution offered, and the terms of the parner. For details of these terms, please refer to the website of the organisation dealing with your bankruptcy. Upon application with, we will forward your information on to one of our specialist debt partners. You will then be contacted, and you will be able to explain your case, and expert advice will be offered in order to ascertain the most appropriate debt solution.