Personal Bankruptcy Pros & Cons

Personal Bankruptcy Pros & Cons to help you understand whether Personal Bankruptcy is the right choice for you. For more information or assistance with regards to an IVA, please contact us here.

*An IVA may not be suitable in all circumstances. Fees apply. Entering an IVA will affect your credit rating.


  • Creditors’ cannot take any further action against you unless the debts are secured on your home.
  • If you have sufficient income, an income payments order will be made whereby you have to pay a monthly amount for a maximum period of 3 years. This should be an amount you can afford.
  • The creditors’ have no say in whether they agree to the making of a bankruptcy order (unlike an IVA where creditors’ have to agree to the proposals).


  • Your credit rating will be affected.
  • Your assets will be sold so that your creditors’ can be repaid their debt or part repaid. This would include your home if there is any significant equity attributable to your interest.
  • Your employment may be effected.
  • If you are in business it may be very difficult to continue your trade.
  • Details of your bankruptcy will be held on the public Individual Insolvency Register and published in the London gazette.
  • You may feel humiliated by the ‘stigma of bankruptcy.
  • You may have a ‘bankruptcy restriction order’ made against you for dishonesty or ‘unfit conduct’ if the circumstances merit this.
Personal Bankruptcy Pros & Cons