30/03/2012 18:38 BST | Updated 30/05/2012 06:12 BST

Escaping the Stigma of Personal Debt

With the economy remaining sluggish, it is no longer a rarity to see news of closed shops, failed businesses and company administrations. But it isn't just businesses receiving final demands for payment - debt in the UK has become personal.

It is said that most of us are only one or two pay packets from bankruptcy. This certainly seems to be borne out by the massive increase in the use of 'payday loans'. Traditionally a reliance on overdrafts was common, now an increasing number of workers frequently seek advances on salary payments through these high-interest short term loans.

Although British personal debt now stands at around £1 trillion, the stigma of debt still lingers and can leave people feeling ashamed, alone and frightened about the future. So it's hardly a surprise that those in debt don't exactly shout it from the rooftops. In fact it isn't just their friends and bank managers they hide from; often their own partner has no idea of the financial difficulty their other half is facing.

Personal bankruptcy occurs in all walks of life - and the recession hasn't been particularly respectful of white collar professionals. Most of my time in the last 12 months been spent advising members of the professional services - accountants, solicitors, barristers and architects, people who have seen their finances compromised by the downturn but perhaps didn't anticipate how bad it would get.

Key in such situations is getting the right advice early. You don't need to head straight for bankruptcy proceedings - assess your options and find the route that's best for you. Current trends suggest that bankruptcy numbers are down, as more people seek alternative routes via debt relief orders and Voluntary Arrangements.

However, you cannot escape the fact that thousands are sheltering in debt management, and thousands of families are feeling the impact not just financially, but emotionally.

Bankruptcy feels like failure and can encourage many people to isolate themselves from family and friends. This can trigger mental health issues, particularly depression.

Some say that debt is a dirty word. But it also can be an isolating and destructive word that millions of people still refuse to say out loud. A lessening of the stigma attached to debt may enable people to seek help faster and admit their problems before they spin out of control. But until that happens, the impact of debt is more antisocial than ever.