I declared myself bankrupt back in 2005 and since that day my life has been better.
It all started after getting into a bit of financial difficulty which lead to loans, ccs & huge overdraft just being dished out. OK i know I did not have to take it up but when you are up against a wall any help will do (i know better now). The final straw was lloyds offering me a 25k unsecured loan in about 20mins! 6 months later (2004) realising it was all too much and payments being £1300 from £1800 take home felt i was ready to have a heart attack from the stress, so sought advice from the CCCS who worked out my budget and what I could realistically afford to pay back, around £700 a month, phew.
During this time, and before, no payments were missed/defaulted so no bailifs involved. Roll on another 8 months and wife is preggers, doh! Have a long hard think about it and decided bankruptcy was the best option (took a lot of convincing the wife as she asked lots of questions) so stopped paying the £700 and filled out the bankruptcy papers and booked an appointment with the court. Day arrives and I am bricking it, wander in and hand over £410 to the lady behind the desk, we go through everything I have put (you need a statement why you are up the proverbial without a paddle) and she says take a seat and the judge will be with you in a minute. 30 mins later she comes back and says judge is happy with everything here is your bankrupty notice, bit of paper stamped with bankrupt.
You are then supposed to get a call from the official receiver going through your papers, eg assets etc (i had none), this didnt happen I just get a letter saying as I have a second car can I either sell it and pass them the money or they will take it away. You do not fill in everything you have eg computer, tv etc unless they are expensive items and purchased in the year before bankrupty (btw they have the authority to go through all your accounts to see where the money has gone). I was totally honest with him I did put down tv @ 300, 1st car @ 500, 2nd car @ 350 and a few other things but only wanted the 2nd car as it was not necessary. He them made me pay an IPA which has to be paid monthly for 3 years, this was actually less than the £700 before, then child arrives, wife leaves job so got the IPA recalculated down to £300 then had to move as renting so dropped to £55 for the last 2 years. I was discharged in 2005 after exactly 1 year but the bankruptcy stays on file for 6 years (defaults stay for 6 as well), so in 2010 it will all drop off my credit file.
So the long and the short of it:
If going bankrupt be completely honest how you have no money to pay your debts (gambling is frowned upon)
If the OR sees from the above all is ok you will be discharged in 1 year
The OR will only take sizeable assets to pay your creditors (antiques, any inheritance until discharged, etc)
The OR can claim any tax you will pay for the following year so your tax code can change alerting your employer (mine didnt but told them anyway)
While bankrupt you cannot have credit for more than £500 (even car insurance if you pay monthly)
Bankruptcy stays on credit file for 6 years
Your name and address appears on a searchable database for 1year +3months after discharge
Your name and address appears in a london paper (and quite possibly your local paper)
The OR will make an IPA (if you can afford one), fail to pay this and you will be hauled before the beak - this lasts 3 years (mines done and dusted)
You are not allowed credit cards (like you really want them), cheque book, so have to take out a basic account probably with a visa electron card
Oh yeah when I went into court that day my total owed (excluding interest payments) was 60k
All I can say is yes I should not have got myself in the situation but took the right steps to get myself sorted rather than ignoring it all as that is when problems happen/life becomes difficult. Now I dont have credit and live on what I have at the end of the month it is much easier.