Dramatic Rise in Personal Bankruptcies...

There has been a sharp rise in the number of people and companies being declared insolvent in England and Wales, government figures show.

Individual insolvencies went up by 8.8% in the third quarter of the year to reach 27,087.

Corporate liquidations also went up by 10.5% in the same period, to 4,001.

Among the individuals going insolvent, there were 17,341 bankruptcies and 9,746 individual voluntary arrangements (IVAs) in the last quarter - 4.6% more than there were twelve months ago.

Individual insolvencies had in fact fallen in the second quarter of this year, but are now rising again.

"For bankruptcy orders there has been a pronounced shift towards debtor's petition bankruptcies [people declaring themselves bankrupt] and away from creditor's petitions in recent years," said the Insolvency Service."

"We expect the number of personal insolvencies to rise from around 110,000 this year to around 140,000 in 2009 and even further thereafter."

Full story: http://news.bbc.co.uk/1/hi/business/7715045.stm

Wow. Those figures are astonishing. More evidence of G Brown's 'prudent' caretakership of the economy? Hah!

At least it seems British society has little, if any any, qualms about Personal Bankruptcy these days - and that's all for the better, imo. Being hopelessly crippled by debt is both debilitating and dangerous: a PB is a sure-fire way to lift yourself out of the sheer f*cking nightmare of being chased by ruthless creditors.

If you're single, no kids, no house, no savings and hopelessly in debt, I'd recommend a Personal Bankruptcy to get yourself out of a deep hole (it worked for me, back in 2001) - in fact I was advised by the CAB to take myself (petition) to court and get a Bankruptcy Order granted to me. And the nice old judge gave me just what I wanted, bless him.

How does it affect your life if you do this? I know about company rules regarding bankruptcy but not personal?

How long would have to wait until you could get credit again, buy a house etc... Also do u have to sell everything you own b4 you can take this option?

I think it's around 3 years or at least it was for my dad.

Return_of_the_STAR wrote:How does it affect your life if you do this? I know about company rules regarding bankruptcy but not personal?

How long would have to wait until you could get credit again, buy a house etc... Also do u have to sell everything you own b4 you can take this option?

Individual circumstances differ, but if you're single, no savings, no house - the biggest difference you'll notice is that you are suddenly free of all debt (and enjoy the protection of the Court from your creditors - which means they are barred from approaching you in any way for the payment of debts included in your Bankruptcy petition). It is truly liberating - and a rare example of how UK law can actually work in favour of the little people.

Nothing was taken from me, not a thing (even my pension was protected from bankruptcy) and the Court ensured my creditors were dealt with (i.e. told to f*ck off).

I got myself a new bank account two weeks after my Bankruptcy, I've been debt-free since 2001 and I've never looked back. Yes, I'm a reformed character and I can actually say I have the law to thank for that. I dunno if I'd qualify for or have a hard time seeking credit now (my bankruptcy is long since discharged), because I've never had to bother trying to find credit as I've been fully employed since soon after my PB was granted.

It really was the case that my PB was the best move I ever made. I could start again. A lot wiser, and totally free from financial worries.

Hey, I have as much debt as the next guy, and would love for it all to just go away, but These little people are the ones who willingly got themselves into debt in the first place.

I think in certain circumstances, it's great that people can be baled out. For instance if someone starts a company that fails etc. But it seems to me this is now being taken advantage of by people who just bought too many shoes on their credit card.

Whatever you do people, don't take responsibility for your actions, there will usually be an easier way out.

I do feel a little sorry for your creditors: presumably one reason those firms referred to in the BBC article are going insolvent is because their debtors aren't paying their bills.

Did you ever offer to pay your creditors anything after the bankruptcy order had worked its magic, btw?

So what you're saying is, forget me spending the last year living the life of a russian peasant, saving my money to pay off the credit card debt I built up last year - instead, max the card out and have a fine old time buying all the gooseberry fool I want and taking expensive holidays for the next six months, then just go declare personal bankruptcy and not have to worry about paying anything off? It sounds like a great plan, but there must be a downside I'm missing, right?

Atreyu wrote:Did you ever offer to pay your creditors anything after the bankruptcy order had worked its magic, btw?

That's what IVA's are for: I decided, in consultation with the Citizen's Advice Bureau, that a Personal Bankruptcy would draw a line under my debts and not leave me struggling to service crippling debts for many years... and the Court agreed (they could easily have decided against granting me a bankruptcy - I only 'petitioned' the court for a bankruptcy order; the court can choose not to grant one and instead enforce an IVA if they think that might be workable, so it actually wasn't my decision in the final analysis: it was the courts).

Cal wrote:

Atreyu wrote:Did you ever offer to pay your creditors anything after the bankruptcy order had worked its magic, btw?

That's what IVA's are for: I decided, in consultation with the Citizen's Advice Bureau, that a Personal Bankruptcy would draw a line under my debts and not leave me struggling to service crippling debts for many years... and the Court agreed (they could easily have decided against granting me a bankruptcy - I only 'petitioned' the court for a bankruptcy order; the court can choose not to grant one and instead enforce an IVA if they think that might be workable, so it actually wasn't my decision in the final analysis: it was the courts).

Yes, appreciate all of that. I was wondering whether you felt there was a moral debt to offer them something, really, once you were out of the woods. Nothing to stop you just giving them some money.

"Ahhh, neither a lender nor a borrower be", said Octoroc earnestly whilst nodding sagely.

Of course now the interest rates have been SLASHED those of us who don't spend more than we earn (it's not a complicated sum to do) and actually SAVE a bit of money are getting shafted. That's the reward I get for "prudent caretakership" of MY economy. Nice.

What was wrong with paupers prisons? EH?

Octoroc wrote:What was wrong with paupers prisons? EH?

You can laugh, but Charles Dickens had much to say on exactly that subject. Putting people into prison for becoming bankrupt (without criminal intent) was always a cruel thing to do: it broke up families, caused homelessness and orphaned children, leaving them to even worse fates as street beggars. Thank god the law saw fit to reform itself and effectively remove bankruptcy from the criminal courts.

pretentious moi wrote:So what you're saying is, forget me spending the last year living the life of a russian peasant, saving my money to pay off the credit card debt I built up last year - instead, max the card out and have a fine old time buying all the gooseberry fool I want and taking expensive holidays for the next six months, then just go declare personal bankruptcy and not have to worry about paying anything off? It sounds like a great plan, but there must be a downside I'm missing, right?

Yeah, you won't be able to buy a house for three years or so, and it'll always be on your credit record.

I've amassed quite a bit of debt over the years, and would dearly love to be able to start again - and would be more than happy to pay a smaller, more affordable amount back to my creditors each month - but with a house, wife and child, I've no options like this available. So I'm not sure they're such a good thing. If you're single, unattached and with no property in your name, there's absolutely no excuse for getting yourself into that level of debt. None at all.

Cal wrote:Thank god the law saw fit to reform itself and effectively remove bankruptcy from the criminal courts.

Perhaps we could have kept public stocks, though.

It would be quite diverting to be able to throw a few rotten tomatoes at the insolvent on one's lunch break. It would make a change from the gym.

I am NEVER going to be able to afford a house anyway. I'm not really serious about doing it, dunno if it's cos of ethical issues so much as I'm a bit conventional I s'pose, think I'd suffer sleepless nights and stuff like that if I really did go overboard with the credit card. I knew someone a few years ago who just kept maxing his card out, then transferring the debt to another card every six months or so (to take advantage of interest free deals). I forget the amount exactly, but it was staggeringly high - he used to piss the money away in casinos too.

pretentious moi wrote:I am NEVER going to be able to afford a house anyway. I'm not really serious about doing it, dunno if it's cos of ethical issues so much as I'm a bit conventional I s'pose, think I'd suffer sleepless nights and stuff like that if I really did go overboard with the credit card. I knew someone a few years ago who just kept maxing his card out, then transferring the debt to another card every six months or so (to take advantage of interest free deals). I forget the amount exactly, but it was staggeringly high - he used to piss the money away in casinos too.

Was his name Andy?

This used to be a fun trick to clear your student debts, Mr Brown closed that loophole a few years ago.

Also, if you change your name you can start to run up debts again. One of my mums friends ex husbands has done this 4 times now.

Dunno if that's some reference to an in-joke or summat! Assuming you're serious, it's a bit of a longshot we'd both know the same feckless spendthrift innit? But yes, his name was Andy.

No, it wasn't. S'pose I shouldn't say his name, but I've just remembered, he also had his own gaff that he sub-letted to a girl, and when she couldn't afford to pay the rent, she shagged him instead.

A friend of mines step-father has a habit of bankrupting himself (I think his current business is ok though). He is quite clever though as he doesnt actually own anything himself (other than the business) but his kids and his partner own a few houses each....

I have no debt and save as much as I can and its people like me who are being punished. I'm starting to wonder why I bother when I could just spend it all now and love every second and have a safety net should I go overboard.
I'm almost never going to be able to afford a house anyway so what the hell am I saving for?

Peter Crisp wrote:I have no debt and save as much as I can and its people like me who are being punished. I'm starting to wonder why I bother when I could just spend it all now and love every second and have a safety net should I go overboard.

Peter, you misunderstand how Personal Bankruptcies work - as do many others here, and many who mistakenly try to obtain one.

PB's are 'granted' by the Courts (nobody is 'entitled' to one by default), that's why they are 'petitioned' either by yourself (you pay the court to consider it) or by those who are chasing you for debt (they pay the court to consider it). So, if I decide to act like a cock and run up humungous credit card debts, or commit simple fraud and then attempt to slip out of my debts, via the bankruptcy courts, it ain't gonna work (and I can tell you some stories I was told by my court-appointed insolvency officer after my appearance before the beak - she was at pains to reassure me that I had nothing to worry about, adding 'you won't believe what we see come through here week-after-week') as the court will take submissions from all interested parties prior to a bankruptcy petition being heard in session.

I myself had to craft a very detailed and informative set of supporting notes (my 'defence') when I submitted my own petition to the Clerk of the Court. This included statements, and entire financial history and the diligent inclusion (and detailing) of any and every debt (or potential debt) I thought I would be liable for at the time of my petition (and beyond). Idiotic or plainly criminal behaviour with respect to previous loans and the running up of debt will be spotted a mile off before your case comes to court: in the event you had, say, deliberately run up a huge credit card debt and then p*ssed away the money, your application for a bankruptcy will be dismissed and you will either face criminal proceedings or an enforced IVA to compel you to pay back your creditors.

I had troubles with the taxman - ergo, the government - and it could be demonstrated I had made every effort to struggle to pay off my debt, but had failed over a period of five years to make any significant progress, despite my best efforts. The court understood this from the documentary evidence and therefore did not hesitate to grant me protection from the Crown in the form of a Personal Bankruptcy order.

And that's how it works. Nobody can just roll into court and expect to have a magic wand waved over them - certainly not if they've been d*cks and deliberately got themselves into financial trouble.