In the event you are facing bankruptcy there are many factors which you must consider before officially declaring it - and remember this decision should not be taken lightly. 2009 brought a very challenging economic climate for many members of society; businesses both large and small went into recession nationwide resulting in many people losing their job, many corporations made redundancies and debt was at all time high.

Before considering declaring yourself bankrupt take a look at some of the reasons as to why it may NOT be a good option for you;

	You will not be eligible for credit; this includes applying for financing via credit card companies, store cards and a mortgage application.
	In the event you own your home this can be sold.
	Non essential items that you own, such as your car, can be sold.
	You will no longer have control of your assets which can often be frustrating and debilitating.
	Bankruptcies are posted in your newspapers and on many websites; this can often be embarrassing for individuals and can in some cases lead to feelings relating to depression.
	Outstanding debts such as a student loan or fines given from court will not be abolished; these will still need to be repaid.
	Where applicable, you may examined in a court of law.
	To declare yourself bankrupt will cost you money.

The Safer Alternative to Claiming Bankruptcy

Luckily, there are alternative options available to avoid declaring yourself bankrupt. An Individual Voluntary Agreement, or IVA as it is commonly referred to, is a legal agreement between you and the creditors. In order to be applicable for an IVA you must have debt that amounts to over £15,000, your debt must be spread between three or more companies and you must be able to provide a receipt of any regular income.

An IVA can avoid declaring yourself bankrupt and reduce the risk of losing financial support in the future. There are many reasons as to why an IVA is a better solution to bankruptcy, these include:-

	Repayments will be agreed at a manageable rate between you and the creditor.
	An IVA will prevent you from losing your home.
	Your car or other luxury possessions will not be at risk of repossession.
	Any interest payments which would normally occur will be frozen in order to help you repay the amount owed.
	All communication will go through an Insolvency Practitioner therefore you will have no personal contact with the creditor.
	In the event you have chosen an IVA this will not be publicised, this will be dealt with privately and avoid further embarrassment.
	75% of your debt can be written off; however do keep in mind this will be decided upon each individual case.

Whether you are considering declaring yourself bankrupt or applying for an IVA you should take into account all your options carefully, do not make any rash decisions. Bankruptcy can lead to long term difficulties in the future and is in no way a 'quick fix'. An IVA can allow you to sustain some financial independence and by encouraging communication via the IVA to the creditors your financial problems can be resolved more efficiently.