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Guest Charlie The Tramp

Is Bankruptcy Really The Easy Option

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Guest Charlie The Tramp

Could be hard for some

John Bangham, director of personal insolvency for KPMG's Cardiff office, said, "This is a sign that the UK's demon debt is showing its ugly head. This indicates that the billions of pounds worth of consumer debt that is building up through loans and credit cards is, in numerous cases, getting out of control."
There has also been a large year-on-year increase in the number of people prepared to report their colleagues, friends and family to the DTI's criminal allegations hotline, set up help catch fraudulent bankrupts.

A total of 98 new calls were made to this line during the year compared to 50 previously.

Together with reports from official receivers investigating bankrupts and directors of insolvent companies, these resulted in 1,227 prosecution reports with evidence of criminal behaviour.

Meanwhile the Government is clearly cracking down on bankrupts in an effort to retrieve assets and cash for creditors. Well they have to look after the banks. Gordon may need their help   :D  In the year to March 31, more than 6,500 bankrupts agreed, or were forced to, hand over part of their income towards payment of their debts. This is an increase of 127% on the previous year. The Insolvency Service estimates that some £22m will be recovered as a result of these agreements.

Mr Bangham said, "This proves that, despite what many people believe, the Enterprise Act was no soft touch and the effect on future income is something I'm sure people don't consider before turning to bankruptcy as a way out.

So maybe it`s not that easy option after all.

I cannot believe the person who drafted the new Enterprise Act could not see what would happen.

Edited by Charlie The Tramp

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A total of 98 new calls were made to this line during the year compared to 50 previously.

yep, that phone is literally ringing non stop.

Could be in to triple figures by the middle of september :)

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Could be hard for some

So maybe it`s not that easy option after all.

I cannot believe the person who drafted the new Enterprise Act could not see what would happen.

No it is fairly easy. The onus is on the bankrupt to declare their earnings. If you are subject to an "Income Payments Agreement" or an "Income Payments Order" it's easy to get out of by engineering a "change in circumstance" ie giving up your job, fake split with the missus etc etc.

Also if you receive an early discharge certificate you cannot then be subjected to an IPA if you get a better job.

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Guest Charlie The Tramp
No it is fairly easy.

The impression I formed from the article was they are gunning for those who borrowed with the intention of going bankrupt a criminal offence, and those who borrowed recklessly. There are provisions in the act I believe which can backfire on these people.

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The impression I formed from the article was they are gunning for those who borrowed with the intention of going bankrupt a criminal offence, and those who borrowed recklessly. There are provisions in the act I believe which can backfire on these people.

That's the impression they want you to get.

Criminal prosecutions in bankruptcies are very rare. Even the provisions for reporting offences under the Insolvency Act rarely result in much being done.

The new provisions for "Bankruptcy Restriction Orders" really don't amount to much of a punishment nor are they (IMHO) an effective detterant.

I've sent many reports on the conduct of bankrupts and company directors to the DTI. Even when the offences are fairly blatant it is usually "not in the public interest" to prosecute.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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