If you have existing unsecured debts that amount to more than you could afford to pay off given your income, then you could help yourself out by declaring bankruptcy.
Find out exactly what declaring bankruptcy entails, and whether it’s the right solution for your debtBankruptcy is a form of insolvency, that is, a declaration that you are unable to reasonably pay off your existing unsecured debts. It can be either declared voluntarily by yourself or involuntarily by an aggressive creditor to whom you owe a lot of money.
Once you’ve declared bankruptcy (or been declared bankrupt), you will no longer need to interact with your creditors. They will no longer be able to take further court action against you, nor will you be bombarded with threatening letters or phone calls from those to whom you owe money. Instead, this responsibility, as well as responsibility of your assets and money, will be taken over by a trustee. This trustee will either be an official receiver (an officer appointed by the bankruptcy court) or an insolvency practitioner (a debt specialist, usually an accountant or lawyer).
A bankruptcy order will usually last a year, after which your existing debts will be written off and you will, for all intents and purposes, be able to start over financially. Declaring bankruptcy involves going to court and the whole process will cost around £700, more if you use the services of a solicitor, which can be helpful but is not necessary.
For more help and advice, contact debt charity StepChange