Should I go bankrupt?

Q I have ?24,000 of credit card/personal loan debt and, as I'm self employed and do not get the work load I did even a year ago, have found it impossible to keep up payments to creditors. Almost half my payments (when I do pay) don't even touch the principle debt as they're eaten away by late payment/overlimit fees.

I have managed to come to agreements with a few of the creditors but find it difficult to even stick to agreed dates for payment etc as my work is very unpredictable and I get paid at different times of the month.

I live as a tenant in a shared house, have no insurance/pension/savings or anything else and am very worried about my position. I would be grateful if you could give me some advice. Should I go bankrupt?

CBM

A You say that you don't have any assets in the form of a home, savings or pension. This means that bankruptcy may be an option for you, especially when it appears that you are struggling just to pay interest debt, never mind trying to reduce the overall capital debt.

It is a serious step to take, however, and I would suggest speaking to a money advisor so that your options may be fully assessed. Trying to make arrangements by yourself is often difficult. Ring the Consumer Credit Counselling Service on 0800 138 1111.

If you do declare yourself bankrupt there are implications for the future. You have to wait a couple of years before you are discharged from bankruptcy. So long as you have not committed a crime in relation to your bankruptcy you can then apply to your county council to give you a certificate of discharge, and let the major credit reference agencies know.

The slate is not completely wiped clean, however. James Jones, consumer relations executive with Experian, the credit reference agency, says: "Lenders will be able to see that you've been bankrupt. This information is held on your file for six years. So if you are intending to apply for a mortgage, credit card or another form of credit, or hire purchase or a mobile phone you may find that your application is turned down if the lender checks your credit file. This isn't always the case, but it is a consequence of bankruptcy that you should bear in mind."

You have a right to find out what is held on your credit file at two of the biggest credit information companies - Equifax and Experian.

You can write to ask them for a copy of your file - it costs ?2 for each request and you can download a form or request a response online. It takes 7 working days by post and is quicker by email.