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Women Now Make Up 40% Of All Bankruptcies

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http://www.independent.co.uk/news/uk/home-news/debt-is-a-feminist-issue-huge-leap-in-bankruptcy-among-women-2034991.html

The number of British women going bankrupt has risen almost fivefold in the past 10 years, with new figures revealing a 28 per cent increase in the past year alone. In some cases, according to insolvency experts, the surge is down to the "irresponsible spending" of women trying to emulate glamorous celebrities, while others are being driven to financial ruin by unemployment, pay inequality and childcare costs.

New figures from the Insolvency Service show that women now account for 40 per cent of all bankruptcies, rising from 6,042 in 2000 to 29,680 in 2009.

Younger women are finding it particularly difficult to manage their money, with those between the ages of 25 and 44 making up almost two-thirds of female bankruptcies. In 2009 17,595 declared themselves bankrupt, up from 13,575 in 2008.

Where female insolvency was once hardly spoken of, for this, too, there are now celebrity "role models". The singers Kerry Katona and Mica Paris both went bankrupt, despite earlier having million-pound fortunes.

Women are also taking up other official debt resolutions, such as debt relief orders (DROs) and individual voluntary agreements (IVAs).

"These figures show that more and more young women have levels of debt incurred through trying to maintain lifestyles that are unsustainable," says Graham Horne, deputy chief executive of the Insolvency Service. "It is critical that all young people are aware of the impact that irresponsible spending can have. Filing for bankruptcy or obtaining a debt relief order should be viewed as a last resort."

Women's rights organisations have countered that, far from being profligate or financially illiterate, they simply "earn less, own less and have lower earning potential" than men. Experts have pointed to the effects on finance of divorce – after which women are overwhelmingly left poorer than men – single motherhood and career breaks to look after children.

The Consumer Credit Counselling Service (CCCS), a debt advice charity, believes women have now overtaken men in the bankruptcy stakes; 51 per cent of the people it recommended bankruptcy to in 2009 were female. Overall, male bankruptcies rose by 18 per cent in 2009.

"One thing that stands out is that 58 per cent of women made bankrupt are between the ages of 25 and 44. They are the ones who are spending and incurring credit card debt," says Nigel Millar, business recovery partner with the accounting service Baker Tilly LLP. "Females have much more control than they used to over their own finances; however, they are getting more credit and incurring the consequences."

Research by the Equal Opportunities Commission in 2004 found that breaks from work to care for children or relatives accounted for 14 per cent of the pay gap. "Women typically earn less, own less, and have lower earning potential," says Anna Bird, head of policy and campaigns at the Fawcett Society. "When it comes to rising unemployment, women who lose their jobs are less likely than men to have savings, so they become dependent on benefits more quickly."

In addition to a rise in bankruptcies, women are also turning to the new DROs – a form of insolvency introduced in April 2009 aimed at people with debts under £15,000, assets of less than £300 and only £50 a month surplus income. In 2009, 63 per cent of DROs were awarded to women, with 12 per cent awarded to people under 25. The number of women entering into IVAs – under which a repayment plan is agreed with creditors – rose by 22 per cent, while the number of men taking the same action rose by 20 per cent.

The CCCS believes that rising unemployment is one reason for the increasing number of insolvent women. And experts have warned that the situation will get worse as the public sector is hit by spending cuts. Women are twice as likely as men to work in the sector, with four in every 10 employed in public sector occupations.

"These figures make for worrying reading," Ms Bird says. "The rise in women having financial trouble is especially disturbing when you consider the likely disproportionate impact of the emergency Budget. Women will bear the brunt of cuts."

Social factors, including rising divorce rates and an increase in lone parents – nine out of 10 of whom are women – are thought to be leaving women more cash-strapped than ever.

"There are a lot more single households. There is a degree to which that is contributing," Mr Millar says. "The only advice I can give people is to live within your means and control your expenditure."

Recent studies have shown that divorce leaves men richer, but women poorer. Research by the Institute for Social and Economic Research in 2009 found that, contrary to popular belief, men were 25 per cent richer five years after divorce, whereas women's incomes fell by a fifth.

However, some analysts point out that in many cases bankruptcy is not linked to poverty but to financial mismanagement. Louise Brittain, head of bankruptcy at the accountancy firm Deloitte, which has handled the bankruptcies of celebrities including Katona, Grant Bovey and Bruce Grobbelaar, explains: "Sometimes they haven't paid their tax bill; others have got involved in legal action which they have lost and can't afford to pay. There are different reasons."

While there are negative consequences to going bankrupt – it must be declared publicly in a newspaper, still carries social stigma and affects an individual's ability to borrow money in the future – some argue that the increasing number of women becoming insolvent can be seen as a positive change.

"It was ridiculously skewed before; when I started 20 years ago, I would hardly ever see women going bankrupt," Ms Brittain says. "The rise is partly because there are more women starting their own businesses, which should be encouraged."

Kimberly Randall, 23, Stockport

"I feel I should know better, but I'm thousands of pounds in debt. Most of my debt comes from credit cards and buying from catalogues. I spent £200 on clothes from a catalogue and now owe them £648 because of £12 non-payment charges. I am overweight and can't just pick up a cheap little dress in the market, but there is a pressure to look good. I do try to make the effort: I will get my hair cut or buy lip gloss. It's definitely more difficult to live within your means now. I used to be able to go on a night out and spend £30, but now I need £70. I'm getting married in six weeks and all my partner's salary is going into the wedding fund. Hopefully, after the wedding we will be able to start to pay off our debts."

Gail Clayton, 37, Sussex

"Over the past few years, I was made redundant from my job as a manager for a transport company, and my husband was made redundant twice. Debts built up. We'd got a loan to buy a car, but couldn't manage it any more, and we reached the limits on our credit cards. We had a mortgage – interest rates alone meant that it was £1,100 – and my parents had to help us to keep a roof over our heads. At one point my mother was so worried about us that she went to the Salvation Army to get us a food hamper. In total, we owe about £48,000 now; about a quarter of that is interest charges. I got a new job, but my daughters are six and three, and I'm spending £15,000 a year on childcare. There is a stigma to being in this situation. People look at you as if you've mismanaged your money, but it is just life, we've had some bad luck. We aren't excessive: we don't go on holiday, and the girls don't have new clothes. We thought about going bankrupt, but were advised that we'd be better off taking up an Individual Voluntary Agreement. It is a huge worry."

Laura Wadsworth, 26, Manchester

"I started getting credit cards at 18, and had five by the time I was 22. I was using them to buy holidays – I went to Malta, Greece, the Canaries – and clothes. It was free money then. I wasn't worried about paying it back. I was working as a supervisor in a pub and being paid £12,000 a year. It wasn't that I couldn't manage on it, but I wanted the rest: new electronics and stuff. I got married at 22 and took out a loan to pay for that. When I was 23 I realised how bad my situation was and set up a debt management plan with an organisation called ClearDebt.I separated from my husband about a year ago, and money was a factor. I'm £14,000 in debt and regret it a lot. I repay as much as I can now, but it will take me years to pay it back."

Women who had it all ...

Rosie Millard

In 2005, the former BBC arts correspondent revealed she was £40,000 in debt and her bank account had been frozen. Though property investments 'turned into a nightmare', she said taking on four credit cards was her downfall. The married mother of four insisted she needed "a decent haircut every eight weeks, Stila make-up and The New Yorker magazine".

Liz Jones

A columnist, Jones says debt problems began in her twenties. "I thought my new wardrobe would get me a job. The bill took years to pay off." A £4,000 cheque for a boob job also bounced. Later expenditures included a £26,000 bat sanctuary. Now, she says, "I dream of owning nothing, so I can sleep again."

Kerry Katona

The singer bought supercars and bikes, several homes and lots of cocaine. When advert, book and television deals later dried up, the ex-Atomic Kitten owed the taxman £82,000. Declared bankrupt in 2008, she famously "danced down the street" in 2009 after being discharged.

Toni Braxton

Despite album sales grossing more than $170m (£110m), the R&B singer-songwriter, who has won six Grammy awards, was declared bankrupt in 1998 with debts of $2.8m. Extravagant purchases, including bamboo-handled Gucci silverware and a personalised home caviare service, contributed to her financial difficulties.

Sarah Ferguson

The Duchess of York fired 12 members of staff last week as financial difficulties pinched. Ferguson is currently £2m in the red, owes £200,000 to solicitors Davenport Lyons, and in May foolishly attempted to sell access to her former husband, Prince Andrew, to an undercover reporter for £500,000.

Sherrie Hewson

The actress, 57, declared herself bankrupt in 2007 after losing her £130,000pa Emmerdale role and being threatened with the bailiffs. Twice-divorced Hewson, who also played Maureen Webster in Coronation Street, once spent £3,000 on a breast enhancement for her daughter's 21st birthday.

LaToya Jackson

One of Michael Jackson's sisters, LaToya filed for bankruptcy in a Los Angeles court in 1995. Financial grief followed an ailing singing career, along with a habit of regularly breaking contracts – in one case leaving her with $550,000 damages owed to one nightclub – and an expensive beauty regime that included manicures costing $500 a time.

Cyndi Lauper

The chanteuse was declared bankrupt in 1981 after being sued for $80,000 by a former manager when a single with her band Blue Angel flopped. She later quit the band and went on to enjoy a successful singing career, with total record sales amounting to more than $25m.

Anna Nicole Smith

The former Playboy model filed for bankruptcy in 1996 despite an annual income of at least $275,000. Court files later revealed she lost jewels worth millions and couldn't pay a $265 gas bill. After the 1995 death of her billionaire husband, she fought a fierce legal battle over his fortune.

Kim Basinger

The actress's downfall came after she pulled out of the Jennifer Lynch film Boxing Helena. The film studio won an $8m judgment against her, exacerbating her long-standing financial woes. The Academy Award winner filed for bankruptcy in 1998 – and admitted that buying the town of Braselton, Georgia, in 1989 for $20m was a mistake.

Edited by Dave Beans

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and admitted that buying the town of Braselton, Georgia, in 1989 for $20m was a mistake.

Impulse buy? We've all done it.

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Impulse buy? We've all done it.

i love this bit

Kimberly Randall, 23, Stockport

"I feel I should know better, but I'm thousands of pounds in debt. Most of my debt comes from credit cards and buying from catalogues. I spent £200 on clothes from a catalogue and now owe them £648 because of £12 non-payment charges. I am overweight and can't just pick up a cheap little dress in the market, but there is a pressure to look good. I do try to make the effort: I will get my hair cut or buy lip gloss. It's definitely more difficult to live within your means now. I used to be able to go on a night out and spend £30, but now I need £70. I'm getting married in six weeks and all my partner's salary is going into the wedding fund. Hopefully, after the wedding we will be able to start to pay off our debts."

love it get married pass over your debt to your husband wait a few years then divorce him and leave him with the debts. great.

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Gail Clayton, 37, Sussex

"Over the past few years, I was made redundant from my job as a manager for a transport company, and my husband was made redundant twice. Debts built up. We'd got a loan to buy a car, but couldn't manage it any more, and we reached the limits on our credit cards. We had a mortgage – interest rates alone meant that it was £1,100 – and my parents had to help us to keep a roof over our heads. At one point my mother was so worried about us that she went to the Salvation Army to get us a food hamper. In total, we owe about £48,000 now; about a quarter of that is interest charges. I got a new job, but my daughters are six and three, and I'm spending £15,000 a year on childcare. There is a stigma to being in this situation. People look at you as if you've mismanaged your money, but it is just life, we've had some bad luck. We aren't excessive: we don't go on holiday, and the girls don't have new clothes. We thought about going bankrupt, but were advised that we'd be better off taking up an Individual Voluntary Agreement. It is a huge worry."

I pick this one out as it more typical of the position anyone can get into through misfortune and a slight lack of organisation. Very different to the oft quoted anecdotes of chavs running up massive store card debts or fading celebs not being able to pay the tax bill from their 15 minutes of fame. Such humdrum stories are also a lot more common.

The 'advice' to go into an IVA is nearly always appalling advice, inevitably given by a 'debt counselling' service who make their profits from managing such schemes. The creditors see precious little after fees have been deducted anyway.

Bankruptcy is intended precisely for people in Gail's position above. She cannot hope ever to pay off her debts while maintaining any sort of life for her young family. She should put her kids first, go bust, and enjoy life again.

She's probably in negative equity so she'll get to keep the house anyway...

Edited by Mr Yogi

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I pick this one out as it more typical of the position anyone can get into through misfortune and a slight lack of organisation. Very different to the oft quoted anecdotes of chavs running up massive store card debts or fading celebs not being able to pay the tax bill from their 15 minutes of fame. Such humdrum stories are also a lot more common.

The 'advice' to go into an IVA is nearly always appalling advice, inevitably given by a 'debt counselling' service who make their profits from managing such schemes. The creditors see precious little after fees have been deducted anyway.

Bankruptcy is intended precisely for people in Gail's position above. She cannot hope ever to pay off her debts while maintaining any sort of life for her young family. She should put her kids first, go bust, and enjoy life again.

She's probably in negative equity so she'll get to keep the house anyway...

wot, just 'bad luck' to have a new car on the tick, an £1,100/month IO mortgage and maxed out credit cards? Shome mishtake shurely...

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wot, just 'bad luck' to have a new car on the tick, an £1,100/month IO mortgage and maxed out credit cards? Shome mishtake shurely...

If the problems are caused by both partners losing their jobs what would you call it?

99% of people make financial planning decisions on the assumption that their future income stream is secure. Take the income away and everybody would be in the sh1t - apart from a peculiarly smug type of poster you only seem to find on HPC who has no idea about how most people are forced to juggle their finances.

The banks have quite deliberately engineered a system whereby most people operate at the limits of their incomes - or in many cases beyond. They can have no complaint if an increasing number of people topple over the edge.

It's the banks wot dunnit!

Edited by Mr Yogi

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wot, just 'bad luck' to have a new car on the tick, an £1,100/month IO mortgage and maxed out credit cards? Shome mishtake shurely...

I was going to buy a Merc the other day. I can't afford it and luckily I left my credit card at home.

Phoney

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wot, just 'bad luck' to have a new car on the tick, an £1,100/month IO mortgage and maxed out credit cards? Shome mishtake shurely...

this thread is NOT about government borrowing you know.

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Guest Noodle

So 60% of new bankrupts are men.

What's the ratio of male:female in the age range of bankrupts?

( :ph34r: Expecting onslaught of 'how many blokes went bankrupt because of female partners?')

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I pick this one out as it more typical of the position anyone can get into through misfortune and a slight lack of organisation. Very different to the oft quoted anecdotes of chavs running up massive store card debts or fading celebs not being able to pay the tax bill from their 15 minutes of fame. Such humdrum stories are also a lot more common.

The 'advice' to go into an IVA is nearly always appalling advice, inevitably given by a 'debt counselling' service who make their profits from managing such schemes. The creditors see precious little after fees have been deducted anyway.

Bankruptcy is intended precisely for people in Gail's position above. She cannot hope ever to pay off her debts while maintaining any sort of life for her young family. She should put her kids first, go bust, and enjoy life again.

She's probably in negative equity so she'll get to keep the house anyway...

I agree. This story illustrates the toll paid childcare, high housing costs and job insecurity are taking on family life. I can't see that taking on a car loan was necessarily extravagant; in many areas it is just not possible to get to work by public transport.

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I agree. This story illustrates the toll paid childcare, high housing costs and job insecurity are taking on family life. I can't see that taking on a car loan was necessarily extravagant; in many areas it is just not possible to get to work by public transport.

The UK is just too expensive to live in and about to get more expensive. It is nuts.

You need 2 incomes to buy a house nowadays but then that rules out having kids. If you have kids one partner effectively works to provide child-care. Heck, even having a dog or a cat is now a serious expense in the UK.

It just seems that more and more ways come along to screw the British.

We have debated this to death before on here. It seems millions of hard-working working-class and middle-class people are being taxed into oblivion. I think more and more the thing to do is to opt out and live on benefits... and I don't believe for a minute that the Coalition will change the benefits culture at all.

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i love this bit

love it get married pass over your debt to your husband wait a few years then divorce him and leave him with the debts. great.

laugh.giflaugh.giflaugh.giflaugh.giflaugh.gif

Sadly so true - and she's fat! He needs a serious bit of advice before it's too late.

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laugh.giflaugh.giflaugh.giflaugh.giflaugh.gif

Sadly so true - and she's fat! He needs a serious bit of advice before it's too late.

I was going to ask a serious question about this - is it possible that a divorce can result in one person being bankrupted whilst the other walks off with a large pot of cash/property/whatever.

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Guest Noodle

The UK is just too expensive to live in and about to get more expensive. It is nuts.

You need 2 incomes to buy a house nowadays but then that rules out having kids. If you have kids one partner effectively works to provide child-care. Heck, even having a dog or a cat is now a serious expense in the UK.

It just seems that more and more ways come along to screw the British.

We have debated this to death before on here. It seems millions of hard-working working-class and middle-class people are being taxed into oblivion. I think more and more the thing to do is to opt out and live on benefits... and I don't believe for a minute that the Coalition will change the benefits culture at all.

I agree with Tulip here.

When in Blighty I don't live like a 'normal' person in a house and wotnot. I'm lucky I get a little box to live in on site with no bills. Then I pack up the gear, dump it in the attic at the old mans place and go to the airport.

Unpatriotic I know, but life is very short.

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I was going to ask a serious question about this - is it possible that a divorce can result in one person being bankrupted whilst the other walks off with a large pot of cash/property/whatever.

I don't know, but suspect yes.

Try mumsnet for a balanced reasoned view.

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I was going to ask a serious question about this - is it possible that a divorce can result in one person being bankrupted whilst the other walks off with a large pot of cash/property/whatever.

not sure about the divorce angle, but certainly one party can go bust leaving the other quite wealthy.

public cases would include one of the Maxwell boys ( or maybe both..cant remember)....personally bankrupt but the wives had a ton of assets.

to plan this, buy things ahead of the bankruptcy ( 2 years) and put them in the partners name. same with cars, houses, savings, shares, everything.

you trust the wife...go bust....she could walk.

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i love this bit

love it get married pass over your debt to your husband wait a few years then divorce him and leave him with the debts. great.

Did you see this bit?

"Recent studies have shown that divorce leaves men richer, but women poorer. Research by the Institute for Social and Economic Research in 2009 found that, contrary to popular belief, men were 25 per cent richer five years after divorce, whereas women's incomes fell by a fifth."

I bet if they had asked the question after the divorce settlement, the result would have been somewhat different. After five years of working hard and saving, as opposed to five years of partying and spending, you are probably going to have a pretty good chance of being a bit better off.

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If the problems are caused by both partners losing their jobs what would you call it?

99% of people make financial planning decisions on the assumption that their future income stream is secure. Take the income away and everybody would be in the sh1t - apart from a peculiarly smug type of poster you only seem to find on HPC who has no idea about how most people are forced to juggle their finances.

The banks have quite deliberately engineered a system whereby most people operate at the limits of their incomes - or in many cases beyond. They can have no complaint if an increasing number of people topple over the edge.

It's the banks wot dunnit!

I deal with peoples debts. 99% of people do not do any financial planning. Most people under the age of 50 seem to think it normal to spend money they do not have. They then blame it on the banks for lending it to them. Thankfully many people are about to learn a hard lesson. This will ensure the next generation show due caution. Only spend money you have.

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"I feel I should know better, but I'm thousands of pounds in debt. Most of my debt comes from credit cards and buying from catalogues. I spent £200 on clothes from a catalogue and now owe them £648 because of £12 non-payment charges. I am overweight and can't just pick up a cheap little dress in the market, but there is a pressure to look good. I do try to make the effort: I will get my hair cut or buy lip gloss. It's definitely more difficult to live within your means now. I used to be able to go on a night out and spend £30, but now I need £70. I'm getting married in six weeks and all my partner's salary is going into the wedding fund. Hopefully, after the wedding we will be able to start to pay off our debts."

Why not address the obesity by eating less, and eating some fresh fruit and vegetables rather than going to McVomit's and then complaining that you need to spend extra on specialist clothes for fatties? And she doesn't 'need' £70 for a night out. She doesn't 'need' nights out, full stop. Neither does she 'need' to spend vast amounts of money on a wedding. Why not have a simple, low key wedding and then begin married life with less debt?

It really makes me angry that feckless chavs like her are treated the same way as those who genuinely got into trouble through no fault of their own, e.g. trying to start a business that didn't work out. If she applies for bankruptcy, the judge should throw her application out and tell her that she's going to pay back every penny.

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Will this now be the shoeless/clothesless recovery?

Spending money you don't have is incredible easy the banks are very generous at encouraging debt.

It's the t*tless recovereh.

You're slipping you are.

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Thankfully many people are about to learn a hard lesson. This will ensure the next generation show due caution.

They said that during the last recession, and the one before.

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They said that during the last recession, and the one before.

thats right. boom and bust....its a side effect of a private banking system backed by central banks.

the solution is to remove the central bank lifeboat.

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  • 244 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% +
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