We consider some of the key myths that surround declaring yourself Bankrupt and explain whether there is any truth in them.

Strange as it may sound Bankruptcy could be one of the best ways to get out of debt that you simply cannot repay. Once you have been through the process all of your unsecured debts will be taken away from you. You will no longer have to worry about them and in many circumstances they will be written off.

However despite the advantages it is natural to be worried about what affect it will have on you and your family. We take a look at some of the worries that many people have and dispel some of the myths surrounding this personal debt solution.

Myth 1: If I go Bankrupt I will lose my house

If you own your own home one of the key worries that you will have about Bankruptcy is that you will lose the roof over your head. The reality is however very different to this. Your house will not be automatically sold from underneath you.

The important thing to understand is that your house is only at risk  if there is significant equity in it. Then the official receiver has a duty to your creditors to try and realise this equity which could result in a forced sale.

But if you have little or no equity in your property it is likely that you will keep your home even after you are discharged from your bankruptcy.

Myth 2: Bankruptcy means I will lose all of my goods and possessions

This is one of the great myths of bankruptcy. In reality you will be able to keep all of your household goods including electrical equipment and computers.

The only time when any of your household goods may be at risk is if they are particularly valuable items which you do not strictly need to keep. For example if you own any valuable antiques you may have to sell these.

One thing that is important to understand in a little more detail is what happens to your car. In fact you are allowed to have a car if you need one. However its value should not be greater than £1000.

Do you want help to go bankrupt? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts

Myth 3: In bankruptcy I will not be able to have a bank account

Many people worry that when they are Bankrupt they will no longer be in control of their money or be able to have a bank account. This idea is completely incorrect.

After declaring yourself bankrupt you are one hundred percent responsible for managing your money day to day. You will receive your wages and other income as normal and must continue to pay your ongoing living expenses. In order to do this you need a bank account and you are certainly allowed to have one.

The problem that you may come up against is that you might be required to change your bank account. Not all of the high street banks will allow you to open a new account with them however there are some that will help you.

Myth 4: If I go bankrupt my spouse or partner will be liable for my debt

The bottom line is that no-one else can be made responsible for paying your debts.

Once you have declared yourself Bankrupt your spouse or partner will not suddenly have to pay towards your debt or put any of their income, savings or other assets towards them.

The only time when a third party will be liable for your debt is if  it is in joint names or they have given a guarantee to pay if you do not. In these circumstances they will still remain liable for the debt after your bankruptcy.

Myth 5: Once bankrupt I will never be able to get a mortgage

It is true that bankruptcy will damage your credit rating. After declaring yourself bankrupt a record of this will be added to your credit file making your credit rating worse and it very difficult for you to get credit.

However the fact that you have been bankrupt in the past does not mean that you can never get a mortgage in the future. When you are discharged from your bankruptcy (after a year) you can start thinking about getting a mortgage if you wish.

The longer you leave it to make your mortgage application after your bankruptcy ends, the better your chances of getting a reasonable mortgage offer will be. After 6 years the record of your bankruptcy will be taken off your credit file and your credit rating will start to improve again. This is the best time to start thinking about applying for a new mortgage.