What the Mail on Sunday Said

Anyone considering Bankruptcy may have experienced fear after reading an article written in The Mail on Sunday with the headline "Bankruptcy cheats face crackdown". But, how much of what was written was in context of the reality of Bankruptcy as it is today?

The article implied that since The Enterprise Act 2002 the rise in the number of people going bankrupt was due to them using the Bankruptcy route as a "Get out of jail free card". The assumption being that The Enterprise Act 2002 made bankruptcy an easy option. However, the writer didn't take into consideration the actions the DTI have taken to raise financial awareness and to ensure better advice is given regarding people's options when faced with personal debt issues.

The article gave the impression that one of the restrictions of bankruptcy was that you could not open a bank account until you are discharged from bankruptcy. However, there are infact 40 basic bank accounts, half of which will allow an undischarged bankrupt to open an account. This in itself indicates the writer of the article is not fully aware of the effect of bankruptcy, therefore giving the impression that the article could possibly be the result of poor research.

The Enterprise Act 2002 (bought into force in April 2004) was made to give honest people a fresh start in life, which would be free from the stress of debt. Not for the purpose of encouraging people to "use insolvency as a way of shaking off creditors". The writer implied that the provision, which allows the IP to request a restriction order on a bankrupt, is hardly used. Perhaps this is because, people who lodge petitions for bankruptcy have not gone out to get themselves into huge amounts of debt and are genuinely unable to repay their debt due to unforeseen circumstances, rather than fraud, recklessness or dishonesty.

If an Insolvency Practitioner suspects fraudulent or criminal behaviour, they will apply for a Bankruptcy Restriction Order (BRO) for the court to assess and decide what action to take.

The writer also states that "New" Government proposals due out in the next few days will make it easier for creditors to set up plans for repayments, an "Individual Voluntary Arrangement". Individual Voluntary Arrangements (IVA's) have infact been around since the 1986 Insolvency Act and used by employees and self employed people.

This only further questions the credibility of the writer and The Mail on Sunday for publishing such an article.

What the writer also doesn't realise is, people who have failed IVA's or not able to get an IVA add to the percentage of people petitioning for bankruptcy.

The worry that this article will have placed on people is not only unnecessary, but also misleading. The reduction in the terms of discharge from bankruptcy is supposed to be a positive change in The Enterprise Act 2002, not a negative one as implied in this article.

If you have sought advice, and you know you have no other option than to take the bankruptcy route then you should not be put off. "Nothing has changed", as Simon Wiggins of Ask the Expert informed one of his posters who read the article and was concerned by it.

If you would like further advice regarding your financial situation FCL Debt Clinic offer free debt advice which will enable you to see what your options are regarding resolving your debt problems.

Nicola Bullimore has been working with people regarding debt issues for a number of years. For more information regarding debt, please visit Debt Questions

---

How to Protect Yourself: Debt Collections

So you are getting collection calls? You're desk is full of unpaid bills. You dread answering the phone. You are having trouble sleeping at night because you... Read More

The First Step To Getting Out Of Debt: Make The Commitment!

These days, getting into debt is easy.Unfortunately, getting out of debt is not so simple for most people. But you can do, if you go about it... Read More

Life After Bankruptcy

Bankruptcy and Credit - What Happens After Your Debts Are Discharged?Bankruptcy will remain on your credit report for ten years. But you may be able to get... Read More

How Do You Spell Debt Relief?

Of all the problems possible in a marriage, finances cause the most marital discord. Many singles consider finances to be their most worrisome issue. Many times this... Read More

Life After Debt ? Strategies for Dealing with Problem Debt

Honorably and ethically rid yourself of burdensome debts using the little known Negotiation Strategy, without having to experience the loss of control and privacy associated with filing... Read More

Top Ten Reasons People File for Bankruptcy

1. Eliminate the legal obligation to pay many of your debts.This process of wiping the slate clean is called a discharge of debts. The goal of a... Read More

How to Get Triple A Credit in 25 Days

Good credit is everyone's dream. A wise use of credit can go a long way. It certainly makes certain goals in life (like acquiring business loan from... Read More

Debt and Your Dreams

You may not realize what that credit card bill is doing to you?Bob is a 27 year old truck driver. He dropped out of college after one... Read More

Debt Settlement -- Why the Critics Are Wrong

After October 17, 2005, a lot of people are going to become interested in debt settlement as an alternative to bankruptcy. That's the date the new bankruptcy... Read More

Budgeting and Debt Management

Debt management (specifically unsecured) is the first step to taking control of your money! Add a household budgeting plan and you've got a powerful tool for money... Read More

What is Debt Settlement?

Debt settlement is the process of negotiating with your creditors so that you are able to pay off a certain percentage of the debt amount that you... Read More

Tips To Take Control Of Debt Collection

Yes, debt collection tips can help. You may think you have no power when the debt collector comes calling, but think again! Creditors don't like losing out... Read More

How to Negotiate Debt Settlements

Knowing how to negotiate debt settlements is the key to securing your financial future. Debt negotiation is the process where in you will contact your creditors and... Read More

Life on a Debt Management Program

Signing up for a debt management program is easy; it's a matter of finding a company you feel comfortable with that is difficult. There should be no... Read More

Bankruptcy Abuse

Bankruptcy is little more than a smack on the hand these days. Creditors are certainly not going to look at you as a wise credit risk after... Read More

British Families and Debt

There is current concern from the Bank of England that British families are getting deeper into debt, however, it has been said that lenders are putting themselves... Read More

Why You Should Get Out of Debt Today?

The main reason for getting out of debt today, is because people with little or not debt have more control over their future:1. They have more discretionary... Read More

Learn The 15 Debt Elimination Steps You Must Take Immediately!

What Everybody Needs To Know...Learn The Truth About Debt Elimination in 2005!Here`s how we have been taught to charge, charge, charge and promised Easy monthly payments by... Read More

Yes to Less Debt

Feeling stressed by the amount of debts you have? Three years ago Michelle was struggling on a nurse's salary. She had run up huge debts with a... Read More

5 Methods Toward Reducing Your Debt

Decreasing your debt is paramount to having a good credit rating as well as giving you peace of mind. You want to get out of debt, but... Read More

Take Careful Consideration Before Filing Bankruptcy

Filing bankruptcy is not fun! It is a last resort if you are interested in keeping an active and acceptable credit report. Bankruptcy is the condition of... Read More

What is Debt Settlement and How Does it Work?

Debt settlement involves negotiating with a creditor or creditors to pay off a percentage of your total debts at an agreed upon settlement amount. Often, people choose... Read More

What Does A Bankruptcy Trustee Do?

Once you file bankruptcy a court appointed bankruptcy trustee will oversee your case. The new law also requires that the bankruptcy petitioner to take a debtor education... Read More

How To Pay Credit Card Debt Off

If you are determined to pay credit card debt off you are making the best financial decision of your life. The reason credit card debt is so... Read More

Debt Elimination 1

If you have multiple debts, you may well be wishing you had a debt elimination wand to wave and make all the debts disappear. You would probably... Read More

Credit Repair? Its All Up to You

Log onto to a search engine such as google.com and type in the term credit repair. It's likely that Google will return more than 25 pages of... Read More