Bankruptcy and Debts Management are two completely different types of debt solutions but, if you are struggling with debt, you may be thinking about the differences between Bankruptcy and Debts Management and which of these debts solutions is right for you.

There are a number of firm differences between the two which you need to be aware of:

* Will my debt be written off?
The main advantage of bankruptcy is that your debt is written off and you can start again from scratch with your finances. But there are some debts which cannot be written off and the bankruptcy order will stay on your credit file for six years.

A Debt Management Plan does not write off any part of your debt but reduces the amount that you need to pay on a monthly basis so your debts become affordable. However, you will have to repay your debts over a longer period of time.

*Future considerations
Bankruptcy comes with a number of considerations which could affect your future, therefore the decision to make yourself bankrupt should be taken very seriously For example, certain professions are closed to bankrupts and you may find it extremely difficult to get accepted for credit in the future.

Debt Management Plans will affect your credit file, although this may already be damaged if you have missed payments to creditors on a regular basis. But it is an informal agreement and therefore should not hinder your professional career.

* Type of Agreement.
Bankruptcy is a legal insolvency procedure, whereas Debts Management is an informal agreement between the debtor and the creditor.

Remember that an IVA could help you to avoid bankruptcy if you owe more than £15,000 worth of unsecured debt.

To discover more about the differences between Bankruptcy and Debts Management, call our debts advisors today on FREEPHONE 0800 0481 777 or fill out the Quick Enquiry form for a callback.

Bankruptcy is for unsecured debts only. The decision to apply for bankruptcy is serious and should only be considered as a last resort and then only if you are unable to obtain an IVA or an alternative debts solution.