Thursday 19th of March 2009
Those facing debt management problems have been urged to only consider bankruptcy as a last resort.
Price comparison site MoneyExpert.com noted that although this option can allow debts to be cleared, there are "very severe strings attached".
It stated that being declared bankrupt prevents a person from entering a number of professions, including being an MP or councillor or becoming a company director.
And there is a possibility that a person’s home would be lost, as well as future assets such as inheritance.
"Bankruptcy really is the end of the line and should only be considered when all other options have been exhausted," the site noted.
However, it highlighted an individual voluntary arrangement as one such alternative, as this would see an agreement drawn up between the debtor and creditors.
It allows those eligible to avoid bankruptcy while setting out a means to repay money owed over a period of five years.
Recently, mental health charity Mind noted that financial difficulty is leading to an increase in problems such as stress and depression.
