If you have no money left over to pay your debts, or you have so little that it will take many years for you to re-pay your debts, you may want to look at bankruptcy as an option.

To find out how to work out if you’ve got enough money to pay off your debts, see How to draw up a budget

Going bankrupt can take the pressure of creditors away from you. You are allowed to keep certain things, like household goods and a reasonable amount to live on.

When the bankruptcy order is completed, you can make a fresh start and the money you owe is typical written off. In many cases, this can be after only one year. Creditors have to stop most types of court action to get their money back following a bankruptcy order (but in some cases the bailiffs may still be able to take your belongings away). This is why you should always take advice from a reputable organisation.

If you are thinking about going bankrupt, you should get advice from an experienced adviser. Your local Citizens Advice Bureau can give you more information and advice about bankruptcy. The are pros and cons to every debt solution.

If your debts and income are below a certain amount, you may want to think about applying for a debt relief order instead of bankruptcy. This is a cheaper option.

If your total debts are less than £5,000 and you can afford to make monthly payments, then you could also consider applying for an Administration Order. Find out more at our section on Administration Orders.