For some people who are in very large amounts of debt, with no realistic way out, bankruptcy may be their only option.
However, declaring yourself bankrupt has wide-reaching consequences and is not a decision to be taken lightly.
If you do decide that bankruptcy is your only way out of debt, then you need to be fully aware of everything you stand to lose.
Here's a summary of the disadvantages of bankruptcy: 1.
You May Lose Assets This depends largely on how much your home is worth and where you live.
In some circumstances, you may be forced to give up your home in order to pay back some of your debts.
However, this is actually quite rare, as nobody wants to see you out on the street with nowhere to live.
2.
Your Credit Rating Will Suffer Perhaps unsurprisingly, if you are declared bankrupt then you can expect your credit rating to fall.
However, it often does not actually fall by very much, and you can rebuild it very quickly indeed.
Some lenders even target recently bankrupt people, because they know they're free of all past debts.
3.
Your Relationships May Suffer Aside from the financial strain, bankruptcy can cause a lot of emotional strain between you and your loved ones.
This tend to be particularly true if members of your family have strong views on money and bankruptcy, and view is as a negative thing.
But with time, you'll be able to ride out the storm.
4.
You May Face Discrimination Although it is illegal for employers and government agencies to discriminate against you because of your financial history, the sad truth is that it does happen.
They may view is as a sign that you are generally unreliable or untrustworthy, and you may find it more difficult to find employment.
When considering bankruptcy, it is important to weigh up all of the positive and negative points and decide whether it is really the route you want to take.
If you still think it's your only way out, then take the plunge and go for it.
At least you'll be well prepared for the potential negatives, and hopefully you'll find that with time you really can transform your situation.