Page last updated at 20:01 GMT, Friday, 5 February 2010

Personal insolvency: Your stories

Cash and card

The number of people who were declared insolvent in England and Wales hit a record high in the last quarter of 2009 and during the year in full.

BBC News website readers have been telling us about their experiences of bankruptcy and debt problems.

SEAN, BRISTOL
Credit cards

I have gone bankrupt twice; once in 2000 and then again in August 2009. The first time I had a young family, I was on a low salary and we just found the bills were mounting up. I used credit cards and bank loans to pay the bills and then a consolidation loan to pay the smaller loans off.

Credit was no problem, in fact it was offered to us on a plate. I started to dread waking up in the morning because I knew the postman would just bring new bills. As much as companies say they want to help you in reality they just want their money back as quickly as possible. I just buried my head in the sand.

It wasn't until the bailiffs turned up that we decided to get help. My wife spoke to my boss and he suggested going to the Citizen's Advice Bureau. Going bankrupt was our only option. I was declared bankrupt for £50 000 and my wife £27 000.


Becoming bankrupt was a huge weight off my shoulders

Once I got over the stigma of being bankrupt, it was actually a huge weight off my shoulders. The phone calls and letters stopped. I couldn't get credit but I didn't want it and we just lived on cash.

Unfortunately it happened again last year. My wife became ill and couldn't work. I eventually had to leave my job to look after her and the family. Our money ran out before I could find a new job and we got into debt again.

I have no trust in insolvency companies and filled out all the bankruptcy forms myself. I am now working again. My company knows what happened but they are happy with the work I do and it's just not an issue for them.

I don't think it's too easy to become bankrupt. You have to prove that you haven't just been reckless with money and there are a lot of checks carried out. It's certainly not an easy option.

CATH, CHESHIRE
writing a cheque

I have been in an Individual Voluntary Arrangement (IVA) since December 2006. I owed £26 000 which has to be paid off in five years. I have made all the payments so far but I am about to be made redundant. If don't find a job, I won't be able to make the final payments and will have to declare myself bankrupt.

Being in debt is incredibly distressing. I was made redundant three times and used credit cards to pay the bills. Before I knew it, I found myself owing a lot of money. I live alone and I had people knocking on the door asking for money. I know the debts were my responsibility but things very quickly get on top of you.

I was so desperate I would have agreed to anything

I couldn't face becoming bankrupt; I wanted to pay the debts off and I didn't want the shame of my name in the paper. I was frightened my family would worry about me, in fact they still don't know about it.

One day I was mulling this over when I saw an advert on the TV. I was so desperate I would have agreed to anything. The debt company promised to stop the creditors and draw up a repayment plan. When I got my most recent statement I discovered that although I had paid back almost £15 000, I had been charged around £5500 in administration fees by the IVA company.

I think these charges are exorbitant. I signed the agreement but the language is so hard to understand and I was just desperate to do anything to stop the constant calls and visits from my creditors.

JOE, NEWCASTLE
Pay slip

I'm one of the 134,142 people who became insolvent in 2009. These days bankruptcy is seen as an easy way out of debt but the truth is it's a terrifying experience.

I'm about two and a half months into my bankruptcy and only now is my life attaining any level of normality.

Like so many I didn't realise that I was using credit unwisely until it was too late. We made some bad decisions on our mortgage and when things got tight we used credit cards. We only ever paid off the minimum amount, then paid off those debts with consolidation loans. We never bought luxuries, it was just for food, transport and day-to-day living.

Things soon spiralled out of control. The phone rang constantly, so I had to turn it off. I was bombarded with messages, but my creditors couldn't understand my situation. From my point of view I had absolutely no money, so what was the point in answering their calls?

I thought I would be treated like a leper

I eventually spoke to a family friend who was also a CAB employee and was advised to go bankrupt. The thought filled me with fear; it felt as if life was over at time. We had four children all under 15 and I was worried how the decision would affect them.

The court appearance was much better than I had imagined. The judge was very kind. I thought I would be made to feel like a leper, so it came as a pleasant surprise to be treated courteously. The Insolvency Service was also extremely professional and took the time to understand the problem, even though they must have a huge case load.

What I would like everyone to know is that there are so many others out there living on this precipice, perhaps just one small disaster from being included in this year's figures. I'd like more people to understand that bankruptcy can be a positive decision.

Read Joe's personal blog Average Joe goes bankrupt



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