So just speaking to a mate who was telling me about a friend of his who has fallen into significant financial hardship. Bank repossessed and just sold the home which will cover the mortgage. Ontop of that he has about 6 defaults totaling around 30k from various credit cards and some personal loans which were sold to debtors. He said his friend is just considering going bankrupt and I instinctively said that's a bad idea. He asked me "why? What is the difference between a number of bad defaults and going bankrupt". I couldn't really answer except for a default sits on your file for 5 years and bankruptcy for 7. So what is the difference in terms of acquiring future finance? I know some lenders will overlook defaults and other lenders like pepper will overlook more significant defaults BUT would any lender consider 30k of paid defaults for future lending? What are the major differences? And what does one do if they have this problem? How can you consolidate debt with a destroyed credit file? Or is your only option to go on payment plans for each debtor?