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Dear readers and followers, I’m pleased to announce that I’ve moved to a new website:

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I’ve also kicked things off with a new post on the subject of Household Deleveraging, discussing why consumers need to dump their debt as part of the boom/bust cycle:

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Hope to see you over there,

Paul

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The Insolvency Service has published the individual insolvency figures for 2009. In line with predictions, there were 134,142 individual insolvencies in England and Wales last year.

2009 was another record year for personal bankruptcy, with 74,670 being declared bankrupt, an increase of 25.9% on 2008. Tellingly, 85.4% of individual bankruptcies were made on the petition of the debtor, which is in line with the trend of the last few years whereby people are choosing bankruptcy for themselves, rather than being forced into it by creditors (petitions).

Another Bankruptcy Poster Boy

Why you shouldn’t worry about people finding out about your bankruptcy.

One of the principal concerns for debtors contemplating insolvency is the prospect of being ‘named and shamed’, and of people finding out about their bankruptcy. As a frequenter of debt forums, this is a topic I see regularly in posts from those seriously considering this option. It seems that people are keen to use bankruptcy as a way of discharging their debt, so long as nobody finds out.

On one hand, this concern is understandable; in weighing up the pros and cons of bankruptcy, perhaps the most disturbing disadvantage for a debtor to discover is that their bankruptcy is automatically advertised in the press. Immediately this conjures up powerful images of a prominent notice bearing your name and status for all to see. However, this is not as alarming as it sounds – for the reality is less dramatic.

A person’s bankruptcy is indeed advertised, but either in The London Gazette or the local press. The former is the ‘Official Newspaper of Record for the UK’, highly unlikely to be read by friends, family or employers. In terms of local press advertisements, unless you associate with people who have a keen interest in scouring the ‘Notices’ section, it is equally unlikely that your bankruptcy will become common knowledge. The advertisement of bankruptcy is more of a procedural requirement rather than an attempt to bring about public disgrace.  The only people who have genuine cause for concern over the advertisement of their bankruptcy are public figures. Fortunately it is only celebrities who have to suffer the ignominy of a truly publicised bankruptcy.

Another thing to consider is that we do not live in the middle ages where a parlous financial situation would have been the talk of the town, and everybody was far more likely to know your business. We live in an age of faceless corporations and anonymous cities. In this context, what is it to a man if an advertisement of his bankruptcy appears in a newspaper? Even if it were to be plastered on billboards on ever major road into town it would simply become lost amongst the morass of messages and slogans that bombard us from every angle and available surface.

Whilst public humiliation should not be a concern for most debtors, if you rent your property it is likely that the Official Receiver or trustee will inform your landlord of your bankruptcy. If you have always paid the rent on time, you should reassure your landlord that without any debts, you’ll have no problems with the rent. If your landlord is unhappy with the situation, it is recommended that you seek legal advice. Unless you count your landlord in your circle of friends and they regularly join you for pint in the pub, the issue of your insolvency will remain private. 

So, if the prospect of being ‘outed’ is all that is stopping you from discharging your debt and reclaiming your life, then you’ve really nothing to worry about. Neither friends, family, or work colleagues, will find out about your bankruptcy unless you choose to tell them, providing your name isn’t MC Hammer.

I'm Rich Beyond My Wildest Dreams...

Tonight’s episode of Dispatches on Channel 4 focused on the lower echelons of the credit industry – doorstep loans, payday lenders and what they termed ‘rent-to-buy’ companies, all of which are effectively forms of sub-prime lending targeting the poor, and a very profitable business to the companies pedalling it.

In the days following my bankruptcy I began receiving mail-shots from some of the doorstep loan companies mentioned in the programme. It was immediately obvious that they must have some form of monitoring system that alerted them to new and potentially vulnerable targets. Just been made bankrupt? Here’s a dummy cheque for £500 – turn this into CASH – NOW!

Such is the size and power of the credit industry in Britain, that the loan companies are permitted to target people who have just been declared insolvent with more credit, allowing them to immediately begin racking up new debts, which they have even less chance of repaying. Whilst the exorbitant interest rates on these loans are admittedly made clear in the adverts, they are unmistakably designed to ensnare people into another particularly nasty debt trap.

Say 'Yes' to a Lifetime of Poverty

The programme also highlighted American payday loan companies who have begun moving into the British high street. Having had restrictions imposed on the interest rates they are able to charge in the US, these companies have found somewhere with less  regulatory inconvenience to do business. So whilst the British government dithers on whether to introduce a cap on the rates these companies can charge, the money lenders can continue to enjoy rich pickings to the detriment of the most vulnerable groups in our society. Never mind the credit crunch – Britain is still a great place to do business.  

 

We used to have a long history of credit controls in Britain, but these were done away with under the Thatcher government and her policies of deregulation. If America, the home of free market fundamentalism and lax regulation can clamp down on these despicable companies and their insidious practices, then surely the British can follow suit?

It’s Friday so it’s time for some light relief. Check out this ‘Bohemian Bankruptcy’ video from the team at iball.co.uk

   

I sometimes wish I’d never gone buy-to-let…

 

Hello, I am a bankrupt.

 I am here to tell you how I took my life back from the clutches of the lending institutions, and to demonstrate how bankruptcy enabled me to change my life for the better.

No Laughing Matter?

By sharing my story I hope to bring attention to the issue of mass indebtedness afflicting our debt generation, and in this way hopefully bring about positive change.

If like me, debt has been an issue in your life, why not take some time out from worrying about how much you owe and have a look around. Through this site I intend to offer comfort, advice, and insight into all things debt related.

One thing I do insist on is that we are going to laugh along the way. Debt is such a dreadfully gloomy subject that it’s important to keep smiling. I think you’ll see what I mean.

I’m just getting started so bear with me.

A.N. Other

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