While legally it is relatively straightforward in the UK to actually file for bankruptcy, the steps, as with any legal case, can be far from painless.

You'll have to justify your application, showing all your credit history to a judge and exposing it to objections by creditors. If you owe them a lot of money, they are not likely to settle easily with minimal repayment offers.

Even if you're successful, there are various impacts that you'll need to review before taking such drastic action.

You will surrender any credit cards that have money owing and others will more than likely close your account. You'll additionally find it near impossible to acquire a mortgage or other large secured loans. Depending on your family situation, it is possible that you may even lose your home.

Not every debt is covered by a bankruptcy filing. You need to check details thoroughly as many loans, taxes and some other debts can be exempt from bankruptcy protection.

Even after you fulfilled the official time period for bankruptcy, you could still find that your financial record is poor and obtaining any credit in the future may be almost impossible. Of course, this may well be a positive thing in the long run!

As you won't have access to new credit cards, this can actually be a blessing. Unfortunately, there are some people who simply should not be able to obtain easy credit, until they can improve their personal financial management.

Beyond the credit impact, you may actually be required to relinquish assets, for example jewellery, valuable furniture or even your car.

Lastly, the bankruptcy procedure itself is not free. Courts incur costs and, if you use a legal professional, that will also add additional charges.

On the upside, you will get relief from debt collectors (assuming they receive notification) and any foreclosure action will be stopped. By taking action sooner rather than later, you will start to rebuild your credit history that can be advantageous in the long run.

It can serve as a huge wakeup call to improve any bad money management habits. For some, it is necessary to hit rock bottom before finding the required discipline to make long term plans however, as this can be hard, you should, think cautiously and obtain expert advice prior to committing to action.