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Originally Posted by f6twister
Before trying bankruptcy, I would look at consolidation loans and see if that will help. It is a better option than bankruptcy because you are still paying back all the money, just in smaller portions over a longer period of time. It takes less time to recover your credit rating going through consolidation.
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Although the rules may be different in the UK, this is not necesarily the case. Often times, it looks just as bad to potential lenders if you are in credit counceling as if you filed a bankruptcy.
I suppose it depends on your situation, and what kinds of debts you have (ie student loans, credit card debts, vehicle loans, ect) but bankruptcy may be the better option for you at this point, rather than spending the next five years struggling to pay off your debts, all the while barely keeping your head above water.
If much of the debt is not secured (ie credit cards) I would probably lean towards declaring it, but if you owe a lot on your vehicle/student loans, you may not actually get rid of those debts - here in America, bankruptcy typically is not able to be used to get rid of student loans, and although it can be used on a vehicle, the vehicle will then be taken away.
If you do decide to declare bankruptcy, I would suggest to immediately begin building your credit up again. Bankruptcy will damage your scores and stay on your credit report for 7-10 years, but as time goes by and you show that in more recent times you are more creditworthy, your score will increase substantially within 3 years or so.
*Just want to clarify a bit - all this applies in America. Providing the UK's rules are the same or similar, my opinion would still stand. If the laws are quite a bit different, just ignore me*