On the day you are declared bankrupt your debt is taken away from you, and you are no longer responsible for repaying it.

As soon as you go bankrupt, the creditors can no longer contact you by law.

Unless you have acted dishonorouably, for example by committing fraud or gambling excessively, your bankruptcy will be lifted after a year and the restrictions will no longer apply.

If you cannot afford to make monthly payments then you will not be asked to do so. If you are able to afford payments, these will be taken at a level that you can manage.

Bankruptcy payments last only three years, compared to five years in an IVA. This means you will be debt-free two years sooner. Moreover, whereas an IVA has to be negotiated with creditors and may take up to 6-12 weeks to arrange, bankruptcy involves little negotiation and you are declared bankrupt on the same day as your appointment at the court.

During the 12 months of bankruptcy you can only borrow up to £500. After that, however, you can borrow again at higher interest rates. Six years after the start of your bankruptcy your credit rating is wiped clean, and you can borrow again at normal rates.