Insolvencies set to hit historic highs

vivatifosi

I know two people that have gone bankrupt that I'm well aware of their personal circumstances. The first became too ill to work after a serious accident. After spending their money trying to stay afloat (on food etc), they've lost their (rented) home, their livelihood, everything. Its hard to see how there was ever going to be an alternative to bankruptcy for them as they will never be to return to work to pay it back.

The other was a profligate spender who didn't stick to DMPs and would buy new clothes, throw parties etc while not paying their council tax, mortgage etc. I didn't feel sorry for them at all and they deserved what came to them.

I wouldn't put them in the same category, although the outcome was the same for both.

Thrugelmir

Alan_M wrote: »

What system would you suggest as a replacement?

I'm a discharged bankrupt, it isn't an easy way out and does carry a stigma.

I'd like to see the system categorised, at least broken down to personal and business and maybe fault or non fault bankruptcy....

But I simply don't see an alternative to the principal of the system.

Prepacked adminstration is a farce. As another cronie of Gordon's pulled a good stunt.

Cobra Beer went down owing unsecured creditors £70 million. Within days a joint venture with Coors emerges. With the said Lord owning a 49% stake.

How can this be right?

A lot of small suppliers have been shafted. The larger ones including Youngs brewery which used to produce the beer have lost out big time.

Boycott Cobra and support your local micro breweries. Plenty of them selling much better products!

kennyboy66_2

Alan_M wrote: »

What system would you suggest as a replacement?

I'm a discharged bankrupt, it isn't an easy way out and does carry a stigma.

I'd like to see the system categorised, at least broken down to personal and business and maybe fault or non fault bankruptcy....

But I simply don't see an alternative to the principal of the system.

Some of the loonier posters on here wouldn't be happy until we brought back debtors prisons. There is a problem with the way discharging seems a bit of a one size fits all - I think it is only people with gambling debts who are treated a bit tougher. To be honest, I don't see the difference between them and people who might have lashed the money on cars, TV's and holidays.

The real scandal are the people who do insolvencies / adminsitrations almost as a way of life. Setting up phoenix companies, doing pre-packs, asset stripping companies then doing exactly the same a few years later.

I'd personally have these people transported to North Korea, Burma or Sudan.

Cannon_Fodder

Q2 = 33,000, up from 29,000 for Q1, verbally stated on BBC News. Edited, it was 30,000 in Q1.

http://www.insolvency.gov.uk/otherinformation/statistics/200908/index.htm




Today's Q2 has been added to the historical list at;
http://www.debtwizard.com/debt-help/debt-solutions/160-insolvency-figures-since-1960

At the bottom of that table there is a prediction of 130,000 for 2009, which is double what it was in 2005...a 400% increase on the worst months of the 80s recession...

lemonjelly

Working in this field, there are, categorically, cases/situations where it is right/appropriate/neccessary for a person to go down the bankruptcy route.

I have had to advise people on this repeatedly for the past 11-12 years. Yes, it has been an increasing phenomenon. Yes, the levels of debt have been massively higher.

However, for most, it has to be seen as a last resort. Remember, going bankrupt can cause you to lose your job, can bar you from specific careers in the future, you can lose certain types of tenancy if you rent. If you are a home owner, generally bankruptcy should be avoided where possible. There are so many other implications of bankruptcy.

I'd be suprised to see figures as high as 125000, though that said, I know in the midlands one local court had exceeded the number of bankruptcies this year within the first 5 months of the year, so I do expect it to grow.

Difficulty is there will be people who have built up debts/financial commitments, and for whatever reason, these are no longer sustainable. Yes there will be cases where they weren't sustainable in the first place, but if we accept that over 1million have been made unemployed, that is a lot of households where the income has fallen significantly. They will no longer be in a position to service their commitments. And they will struggle to gain employment quickly.

Previously, when credit was more accessible, people would access credit to pay creditors etc, & find work quicker. That won't be the case now.

Bankruptcy may be percieved to be easier etc, but in reality it is not the end of the problems. It is the beginning of the end though. And for some, the removal of the burden, stress etc can be a lifesaver - literally.

It may be a system that has faults, and there may be those who manipulate the system to their advantage, but it isn't an easy ride.

It can happen to anyone, all it takes is an accident, a dodgy employer/supplier, the wrong friends/partner/girlfriend/boyfriend.

We should take care not to be all sanctimonious about bankruptcy.

lemonjelly

kennyboy66 wrote: »

Some of the loonier posters on here wouldn't be happy until we brought back debtors prisons. There is a problem with the way discharging seems a bit of a one size fits all - I think it is only people with gambling debts who are treated a bit tougher. To be honest, I don't see the difference between them and people who might have lashed the money on cars, TV's and holidays.

The real scandal are the people who do insolvencies / adminsitrations almost as a way of life. Setting up phoenix companies, doing pre-packs, asset stripping companies then doing exactly the same a few years later.

I'd personally have these people transported to North Korea, Burma or Sudan.

Great post Kenny :T

bo_drinker

vivatifosi wrote: »

I know two people that have gone bankrupt that I'm well aware of their personal circumstances. The first became too ill to work after a serious accident. After spending their money trying to stay afloat (on food etc), they've lost their (rented) home, their livelihood, everything. Its hard to see how there was ever going to be an alternative to bankruptcy for them as they will never be to return to work to pay it back.

The other was a profligate spender who didn't stick to DMPs and would buy new clothes, throw parties etc while not paying their council tax, mortgage etc. I didn't feel sorry for them at all and they deserved what came to them.

I wouldn't put them in the same category, although the outcome was the same for both.

It y f there will be a lot of the latter style coming through this time Put it on the plastic brigade etc

ad9898_3

Cannon_Fodder wrote: »

Q2 = 33,000, up from 29,000 for Q1, verbally stated on BBC News. Edited, it was 30,000 in Q1.

http://www.insolvency.gov.uk/otherinformation/statistics/200908/index.htm




Today's Q2 has been added to the historical list at;
http://www.debtwizard.com/debt-help/debt-solutions/160-insolvency-figures-since-1960

At the bottom of that table there is a prediction of 130,000 for 2009, which is double what it was in 2005...a 400% increase on the worst months of the 80s recession...

We know another graph that looks similar to that don't we, I wonder if there is any link.

shakerbaby

Ah this must be more of these green shoots the bulls keep waffling on about. :rotfl:

vivatifosi

kennyboy66 wrote: »

The real scandal are the people who do insolvencies / adminsitrations almost as a way of life. Setting up phoenix companies, doing pre-packs, asset stripping companies then doing exactly the same a few years later.

I've put in a weblink to a document about phoenix companies that you may find interesting. In charging directors as unfit, the government has a problem in getting evidence of foul play. Perhaps there should be a mechanism put in place where more people can whistleblow in order that more directors who should be declared unfit can be.

See section on this country at:
http://www.insolvencyreg.org/sub_publications/docs/Report%20on%20Phoenix%20Companies%20Final41029.doc

Its also scary how few countries are able to keep tabs on people behind serial phoenixes.