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The number of asset-less debtors going bankrupt has reached such levels that the cost of processing these bankruptcies is becoming unsustainable for the Insolvency Service, according to Stephen Speed, chief executive and inspector general of the Insolvency Service, who was speaking at the recent Insolvency Today annual conference.

While this news of asset-less debtors using our easy bankruptcy laws to start afresh is encouraging, Speed also said that a point had almost been reached whereby taxpayer money would be required to cover the shortfall of the processing costs, which, according to reports, seems likely given that the Insolvency Service was forced to write of £81 million earlier this year.

Try the Banks

No, you're not having any of it back

Following the great taxpayer robbery of the banking bailouts – where free-market profit-chasers brought the world to its knees with their financial jiggery-pokery and eye-watering bonuses and then went cap in hand to the state when it all blew up – the idea of more taxpayer money being required to plug a hole, this time to cover the mistakes of individual borrowers, will no doubt result in more opprobrium being directed at debtors by the more pious sectors of society. Yet, and now stop me if this sounds ridiculous, surely it would be better to assess each individual’s case and try to determine whether the lenders had been at all culpable and had irresponsibly lent to people they knew would have little chance of paying the money back?

Making the banks pay for their mistakes and their greed – what a ridiculous notion.

Your bankruptcy will appear in the newspaper

To anyone who is maybe worried about their bankruptcy appearing in the newspaper, here I am talking about it in my home town newspaper. However, despite the publicity I am still a long way behind Kerry Katona.

You can view the pdf of the article here: Chron article 2

 

I was recently interviewed on the John Griff programme on BBC Radio Northampton. This was my first (and hopefully not my last) radio interview and it was a lot of fun. Amongst other things, we discussed my experiences of personal debt and bankruptcy which lead to me writing my book.

UPDATE: The interview is now available to listen to here.

I was recently asked by the guys from the Debtology website to write a guest post in response to an earlier article on the subject of bankruptcy (‘Bankruptcy – what IS the big deal?).

In my piece I talk about why we need our easy bankruptcy laws and also about how attitudes toward debt and bankruptcy are changing.  

If you are thinking about going bankrupt but are maybe worried about how you will be perceived, then you should definitely have a read.

The article is available here.

PS. If you are worried about debt and in need of free debt advice, then perhaps the guys from Debtology can help.

Hello, I regret to announce that the previous author of this site, Mr. A.N. Other, is being retired, as there’s little point in remaining anonymous when you have book out with your name on it. Speaking of which, The Bankruptcy Diaries is being released next week. Below is the great blurb from the publisher, Revenge Ink:

Anyone can be king for a day... up to the limit on their card.

 It’s the year 2000 and Paul Livingson is in his first office job in Bristol. With student debts hanging over him, Paul still wants to live the high life: holidays in Europe, booze-fuelled nights of excess, designer fashions. But how to do it all? Easy! More credit! Spending gets even easier when Paul meets Kelly, an inspiring, free-spirited singer in a band with whom he falls in love. Written in the form of a diary, this book is about losing control and learning to regain it. It is about putting individuality above consumerism and asking who is responsible for the financial meltdown that more and more people face everyday. Is it all down to personal responsibility? Or does the system encourage massive debt that makes slaves of us all just for a handful of profits? An entertaining, honest and thought-provoking book that makes Lao Tse’s great point: doing nothing, everything is done. 

So, if you think that sounds interesting you can buy the book here.

Also, please visit the Revenge Ink website, as they’re doing some really great things. In the words of co-founder Amita Mukerjee, their books ‘are all about difference. Impossible to categorise, experimental, extreme, each one radically distinct from the other.’

A recent article by Lisa O’Carroll highlighted the interesting phenomenon of bankruptcy tourists from Ireland heading to the UK to discharge their debts. Due to more favourable insolvency laws – a bankrupt in the UK is discharged after just twelve months, whereas in Ireland it’s a draconian twelve years – Irish debtors are doing the sensible thing and crossing the sea for a quick release from debt.

Fish 'n' Chips, Tea, Becoming Debt Free

The most fascinating revelation in the article was that, ‘as few as 29 people were made bankrupt in Ireland last year’, a staggeringly low number considering the severity of the property crash in the Republic, especially when compared to the 79,000 who went bankrupt in the UK during the same period. It’s not difficult to deduce that the UK is effectively operating as Ireland’s bankruptcy court, which is considerably more helpful to Irish citizens than another bailout loan. Although ascertaining exactly how many of the UK’s bankrupts are made up of Irish citizens would be difficult, and clearly some Irish debtors will be eloping overseas without bothering with any formal debt discharge procedures (I would love to hear from you guys).

I just hope the message is getting through to the people at the bottom. The Irish banks have had their bailout, in turn subjecting citizens to some of the most brutal cuts in Europe. Now we hear tales of Irish property speculators bailing themselves out, by utilising UK laws. I’ve already called for a ‘People’s Bailout’, and now I extend this call to the people of Ireland – don’t be the chump left with a sackful of debt whilst everyone else extricates themselves from the mess. Get yourselves over to the UK and get rid of that debt!

Update: I have found a great article with information for Irish citizens wishing to go bankrupt in the UK. If you wish to know more then click here.

With massive student protests taking place in London today I’ve noticed a lot of web chatter about potentially putting oneself through university, racking up the fees and then declaring yourself bankrupt afterwards. A very shrewd move. However, this loophole was closed years ago after a few canny students began doing this. But the idea is a good one.

Sing for Free Education!

My advice would be to pay off the student loans with personal loans and credit cards before going bankrupt. However, one needs to be very careful here. The authorities are not stupid and could either reject your bankruptcy petition, or slap with you with a restriction order that lasts a decade. For this reason I would allow a good stretch of time to pass after paying off the student loans, keep racking up as much debt as possible – have ball whilst you’re at it – and then press the bankruptcy button a year or two down the line. I’m not sure whether this would work but I’d love to see somebody try. Well, it has been a day of protest and revolt…

Beneath the headlines lies the truth

The latest insolvency figures were published today and the headlines were all about the fact that there had been a sharp drop in personal bankruptcies during the third quarter of 2010 (the lowest level for five years). However, the total number of people declared insolvent during this period only fell 3.7% on the same period a year ago. This is because other forms of insolvency, Individual Voluntary Arrangements (IVAs) and Debt Relief Orders (DROs), have become more popular. It’s not that fewer people are struggling with debt and deciding to walk away from it, it’s just that they are choosing to free themselves in a different way.

My personal view is that this slight dip in insolvencies will be very temporary. Once the impact of the government cuts are felt, and if interest rates rise (they have to someday), those on the precipice will be tipped over the edge. 

80% Choose FreedomBy George! It's so easy to choose life and walk away from dreary debt

Another interesting fact was revealed in a statement from an insolvency practitioner, who said that,

 “More than eight out of 10 bankruptcies were made on petition of the debtor, which shows that many people have had enough and are throwing in the towel. They have been living with the pressure of debt for too long.”

So eighty percent of bankrupt’s chose this option for themselves rather than being forced into it, a heartening statistic that demonstrates that people are waking up to the fact that they can easily free themselves from the scourge of debt and the rule of the banks.

It’s time to laugh in the face of debt. Whether you just want some light-hearted relief from the gloom of indebtedness, or have serious rebellious intentions then you’re in the right place.

  • Check out my roll call of illustrious bankrupt’s in the Bankruptcy Heroes section.
  • Read my from my novel, The Bankruptcy Diaries, as I post entries from the book.
  • You are not alone – peruse the Problem Page to hear tales of debt woe and life enhancing solutions.
  • Learn the stories of Debt Fugitives, the international community of people on the run from the long arm of the debt recovery agencies

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.

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