^Qwerty^

A record 26,021 people went bankrupt between April and June, the Government said today.

Alas

Might be the new legislation. Another copout from the Government.

davegtt

I was waiting for this thread. Thought Pete95 would post it first though Aparently they think over 100,000 business's will go under this year....

unclebuck

No they don't. They predict a record number of personal insolvencies of 100,000 in 2006, whereas the number of companies going into liquidation fell slightly during the first quarter of 2006.

Apperently the reason behind the sharp increase in bankruptcy is that New Labour have made it an easy option because of changes they made to the law in 2004.

Of course the government's 'Insolvency Service' vehemently denies that bankruptcy has become a soft option.

http://news.bbc.co.uk/1/hi/business/5244202.stm

davegtt

Only quoting what I heard on Radio 1 this morning.

rik1471

The facts don't lie

Suresh

If lenders face big losses in cases where they have unwisely extended credit, then they will learn to look more carefully at credit quality before making loans to individuals. Risk of a credit boom turning into a bust will be reduced as a result.

KiwiGTI

Yes, but it depends on whether the damage has already been done. Banks are experiencing record profits but also record bad debt write-offs.

It's amazing though that people think there will never be another recession.

Not too convince that the 2004 bankruptcy law changes have affected things too much, it is still a last resort and also student loans are not covered now so you could argue there should be less reason to go bankrupt.

But it certainly is a joke to the educated bankrupt. You could be discharged in 3 months without a payment order these days. And the sub-prime credit market is competitive these days with sometimes only a 1% difference in interest rates. (Obviously homeowners would get screwed by going bankrupt)

lozgti

Thought the idea of early discharge was to promote people into taking a risk business wise(after some labour eejut saw the american system)

Lots of people in their 20's and 30's going caput.Sums like £100,000 not unusual.Lots of credit card debt not unusual.

Gruesome but I have been waiting for many of these things.Bankruptcies and repossessions to take off

Boost II

iTrader: (1)

Students have apparently cottoned on to this, using bankrupcy to wipe out their debts when they graduate. They go off travelling for a year , come back and get a job and before long they can get a mortgage and all that stuff just like anyone else but with out thire loans to pay off!

Diablo

UB,

Couple of points.

The Insolvency Service is comprised of civil servants, not politicians. What they do may be determined by legislative changes, but they are generally not any happier about whechever party is in power than anyone else.

To suggest that they, like HM Revenue and Customs, are in the pockets of those elected shows a naivety and misunderstanding of the position.

The increase in bankruptcy is due to three main factors, one of which has undoubtably arisen from the change in legislation brought about by B.Lair's cronies. The other factors are irresponsible lending and the general inherant stupidity of the masses.

Those bankrupts who are clever enough to use and abuse the system are but a tiny percentage of the total. Most are, quite literally, too stupid to even know how.

The real culprits in all of this, ironically, not the government who's legislatve changes were certainly flawed, but rather the debt consolidators with their outrageous interest rates and hidden charges and the private sector unregulated "debt advisors" who having sensed an opportunity to milk the system actively promote bankruptcy as a way out.

Irresponsible lending generally is a difficult one. If the man in the street is too stupid to realise that "buy now, pay later" only works if you can afford it, can you really blame the lender?

To this day, I've never seen any form of intelligence testing on any credit application form. Start doing that, and we'll see a reduction in the numbers...

Diablo

And another point UB,

Many, many businesses fail but never formally go into liquidation, Administration or receivership. Therefore they never make the stats.

KiwiGTI

Student loans aren't provable in a bankruptcy, same as fines, benefits owed etc.

stringvest

that is correct


also to add i went bankrupt earlier this year as it was well to be honest an easy way out, i dont care if i cant get credit for 6 years


yes learned by mistakes and thank my lucky fortunes i found a way out before it really affected my life badly


im now debt free and a lot more happy


i wiped out 20+ on credit cards


but i wont ever want credit again

Mitchy260

Just a quick question, dont bailiffs come round your home and take everything worth taking? Tv/sofas/washing machine etc?

What about car?

Not worthwhile going bankrupt if your going to lose all your posessions?

Maybe they dont i dont know???

stringvest

to be honest if your reasonably intelligent you loose trace of any such valuble posessions inc cars beforehand, transfer ownership etc, but they do ask you if you own onw and what is it etc and if you have sold one in last 12 mts


i was fine as cars do not get registered in my name as such and jewelry is ever so easy to loose



never had any one visit my house

Petem95

Seems Qwerty beat me to it

Could well be bust now! Look at the amount of bad debts banks are having to write-off - significant amounts, and the amounts are far higher than for last year for all the major banks. Banks will tighten up on lending no doubt, which in turn could hurt the economy.

Suresh

I'm not a credit analyst, but know something about assessing risks involved in bank lending. The financial institutions that lent pots of money out on an unsecured basis to unsuitable borrowers quite simply deserve the losses they are now incurring. Tighter credit = lower inflation and eventually no need for further rate rises.

KiwiGTI

Most people go bankrupt to stop the bailiffs coming around.

No, they will not touch anything that is considered normal home furniture, TVs, appliances, clothes, beds etc.

They will only look for things of high-value which would include pieces of art, vehicles, expensive jewelry, boats, property etc.

They can and do search DVLA to see if you have any vehicles but they are pretty lenient, espcially if you need your car for work, have kids etc. The worst they will do is make you sell it and get something worth £3000 (that's the theory anyway) In practice they probably won't care about any car worth up to £10-11k because by the time it's auctioned etc the return to creditors is not much and they have to let you have £3000 anyway for a new one.

In any case they will let you dispose of it to family/friends for a fair value. If your car has finance outstanding they usually won't make you sell it unless it realises a large amount.

With the backing of a good lawyer you can get away with almost anything. It's no surprise that the professions most likely to go bankrupt are lawyers and accountants. The system is very workable especially if you have a compliant wife.