Go down to your local CAB *in person*. Many solicitors will give a certain amount of advice (typically half an hour or so), either at some kind of "clinic" or over the phone, so try that as well.
In general, the primary piece of advice in this situation is to negotiate with your creditors for breathing space. Most will do this, as it helps them get their money back, while they lose most if not all of it if you go bankrupt.
Whatever you do, though, get legal advice as soon as possible, or sooner if you can arrange it.
Of course it can. Since you are contemplating bankruptcy, you should be aware that the finance company will cause trouble (putting it politely) for your mother as guarantor of the loan. She should get legal advice as well because of this.
You should be careful about this - you have in effect created a "favoured" creditor, and that might get you some degree of trouble if you do declare bankruptcy.
Can you spare the money for the fees to declare bankruptcy? The court fee is £150 for a debtor's petition, and the Official Receiver's deposit is over £300.
There are some specific reasons why the Official Receiver might bring a criminal prosecution against you, mostly to do with concealing assets. Be aware that the OR can also prosecute someone who helps you to conceal assets, so don't let your parents talk you into letting them claim that your things actually belong to them.
In general, unless the OR suspects you of concealment, the most you will get is a Bankruptcy Restriction Order (BRO). This is a court order that imposes the same restrictions on the bankrupt after discharge that he had before, with a couple of added extras, and can last anywhere from two to fifteen years. BROs are made in cases where the bankrupt has materially contributed to his bankruptcy, in a "culpable" manner, or where he has, for example, gone on a spree just before declaring bankruptcy, or where the bankrupt failed to keep his books properly (which applies mainly to sole traders).
It does depend on the nature of the mis-management, but I wouldn't worry about going to gaol.
Most likely, you will get the standard bankruptcy restrictions, possibly extended after your discharge because of a BRO.
The restrictions again:
- The bankrupt may not obtain credit of more than £500 without informing the would-be creditor of his status. Breaking this restriction is a criminal offence. The definition of "obtaining credit" is broad, and includes taking money in advance for providing goods and services.
- The bankrupt may not carry on business under a different name than the one under which he was made bankrupt. Breaking this restriction is a criminal offence.
- The bankrupt may not "being concerned (directly or indirectly) in promoting, forming or managing a limited company, or acting as a company director, without the court's permission, whether formally appointed as a director or not." Breaking this restriction is a criminal offence.
- The bankrupt may not hold some public offices - MP in England and Wales, local councillor, school governor, member of the National Health Service Litigation Authority.
- The bankrupt may not be a trustee for a charity or pension fund.
Some of these might not be very important to you, but the first two are the ones you probably need to worry about.
Also bear in mind that you will probably lose your bank accounts, credit cards, overdraft facilities, and so on if you go bankrupt. It's normally possible to open a "basic bank account" with no overdraft facility while you are an undischarged bankrupt.
To sum it up, get legal advice. There may be avenues open to you besides going bankrupt. You may be surprised by what you can arrange.