Most people dread the term bankruptcy and see it not only a social stigma but also as a deep and complete personal failure. Though ideally, one should indeed not reach that particular level, once you are there it is no good if you berate yourself about it. What you need to do is find out what can be done. As somebody aptly commented, 'it does not matter how many that you fall if you make the effort to stand up again' - it is indeed important that you know what you can do when you find yourself in such a tight spot.
Bankruptcy rules in UK are not as severe today as they were a few decades ago. The law has incorporated a good number of checks and balances to ensure that the person who is bankrupt the first time is able to “stand up” again. Check out the following and get an idea:
Use bankruptcy as the real do-or-die option - declaring bankruptcy in UK is still a very serious affair that impacts negatively on your credit rates. Even after the bankruptcy period is removed from your credit records, you would find that most of the financial institutions would ask you whether you had ever been bankrupt or not.
Limit on loans - the UK law clearly states that you would have to inform any loaning source about your bankruptcy in the past if you need/avail of a loan above 500 Pounds. This rule is applicable even if you take a hand loan (from friends ot relatives).
Effect on your job - some high-position jobs would be compromised if you declare bankruptcy (for example, police officer, counselor, accountant) hence you should find out whether your decision to go bankrupt would impact your job in anyway.
Your credit records - you will a black mark against you in all the official and private financial institutions for six long years. It is only six years are completed, that the bankruptcy record will be deleted from your files. You could however apply for a loan after one year of bankruptcy.
Any disposable income would be attached - There is an Official Receiver whose sole work would be engaged to check out your assets and all disposable income. Any and all the disposable that comes to light during such investigation would be listed and a portion of it escrowed and used for payment of bills.
On the other hand there are laws that protect you from unnecessary harassment and you should be aware of your rights and the clauses of the law that are for you even if this abysmal condition.
You are allowed to apply for a loan after a year from bankruptcy, as compared to the five period a few years ago
You are entitled to live with dignity sans acute mental pressure and harassment tactics that the debt collector might choose to employ. There are sufficient laws in UK, which forbid such extreme practices. Be aware of the protection of law and explain your debtor that you know your rights regarding debt collection and hence, he/she would better stay within the powers that the law gave them and not beyond.