Teddy's Music

And the impact on your credit rating will also be less disastrous.Ways to deal with a debt crisis* Debt management plans: This is the least formal way to get on top of your borrowing. "If you're a young person without much in the way of assets, it can make sense," says Walker. "But bankruptcy does still have very serious implications."A better bet, for many borrowers, may be to come to an agreement with creditors - either an informal pact to make fixed repayments over a set period, or an individual voluntary arrangement (IVA), a legally-binding deal that is less serious than full-blown bankruptcy.The downside to IVAs is that it is likely to take much longer to be clear of your debt - five-year plans are common. For these reasons, the CCCS says bankruptcy only makes sense for a small number of people with debt problems - of the cases it handled in the first quarter of the year, it recommended bankruptcy to just 12 per cent of borrowers. "Any income earned during the bankruptcy order can be claimed against for an income repayment order for up to three years." That's assuming the bankrupt is able to earn an income. In professions such as the law, bankruptcy could mean losing your licence.All insolvencies stay on your credit file for at least six years.

05/11 - 09/11 Obtain Brad Paisley Tickets playing in Heinz Field, Jiffy Lube Live. Brad Paisley is playing in Pittsburgh, Bristow and Frisco. Brad Paisley tickets

05/11 Pick up Usher Tickets staging in Dunkin Donuts Center, Power Balance Pavilion. Usher is staging in Providence, Sacramento and Newark. Usher tickets

08/11 - 09/11 Land Kesha Tickets staging in 1stBank Center, Bank of America Pavilion. Kesha is staging in Broomfield, Boston and Miami. Kesha tickets

As a result, bankrupts are likely to find it particularly tough to get credit for an extended period after being discharged - the best case is they will have to pay substantially higher rates of interest.

The official receiver, or an insolvency practitioner, divides up the assets and shares them out among the bankrupt's creditors."Bankrupts are not allowed to obtain credit of more than £250 and have to seek permission to use bank accounts and credit cards - only basic living expenses can be paid, with any surplus going to pay off creditors," adds Holmes. "Many borrowers see bankruptcy as a new lease of life," she says. "For many, being free from the worry of the debt is such a relief that it is worth the consequences of the bankruptcy." The problem, debt experts warn, is that borrowers may not realise how serious those consequences are.To start with, bankrupts lose all control of their assets, including possibly even their share of the family home. "It now looks very attractive - you can be discharged from bankruptcy after six to 12 months, with all your debts cleared."Frances Walker, of the Consumer Credit Counselling Service (CCCS), says someone going bankrupt can now expect to be discharged after an average of eight months, compared with at least three years before the law changed. The increases reflect a five-year trend - the number of personal bankruptcies has risen every year since 2001, but began to spike particularly sharply upwards in 2004.Tony Supperstone, a consultant at accountants BDO Stoy Hayward and president of R3, the insolvency practitioners' trade body, says the Enterprise Act passed that year has lessened the stigma attached to bankruptcy. "However, many successful applicants will be unaware of the difficulties they face as a result of doing this." Almost 15,400 people were declared bankrupt in the first quarter of the year , a 12 per cent rise on the last three months of 2005, and a 51 per cent increase on the same quarter of last year.

"A growing number of people with huge debts, and recent changes to legislation making it easier for people to climb out of bankruptcy have resulted in a huge increase in personal insolvency applications," says One Advice's chief executive, Chris Holmes. Thousands of cash-strapped borrowers who are preparing for bankruptcy have not understood the hardship they will face as a result, according to a warning from the debt specialist One Advice. It claims more than 110,000 people are considering declaring themselves bankrupt this year, in many cases because - wrongly - they consider it to be a soft option. Now, however, borrowers just switch again when their introductory offer runs out - just the sort of trick GCSE students should be learning.. So, unless you have one of its cards already, you won't be able to take advantage of the excellent rates Amex offers on borrowing switched to it from rival plastic.While that's a shame for bargain hunters, it is also evidence that people are actually becoming more financially aware than campaigners for better education may realise.There was a time when lenders could sucker people with fantastic upfront rates and then make a fortune off them once the deals expired. Sign your kids up for GCSE personal finance as soon as you can - it could easily be the most useful thing they ever learn at school.* The silver lining to disappointing news from the credit card industry is that many grown-ups may not be as financially illiterate as previously thought.From this week, American Express is no longer accepting balance transfers from new customers. What could be more practical than a GCSE or A-level in running your financial affairs? Teaching kids about money as one part of a maths course is a good start.