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Bankruptcies Soar To New Peak

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Bankruptcies soar to new peak

By Robert Watts

(Taken from: The Telegraph - 30/04/2006)

A potent combination of Britain's £1 trillion debt mountain and a relaxation of the bankruptcy laws is forecast to drive a record 100,000 people to go insolvent this year.

Bankruptcy experts expect the Government will on Friday reveal that 23,000 people became insolvent in the first three months of this year, 2,500 more than in the previous three months and the highest number in any quarter since records began in 1987.

"The situation is deteriorating rapidly, far faster than we expected," said Vicky Redwood, of Capital Economics, the City consultancy.

Insolvencies have been rising steadily ever since the Government made the penalties for bankruptcy less onerous with the 2002 Enterprise Act.

Mark Sands, the head of personal insolvency at KPMG, said: "Bankruptcy is becoming a lifestyle option for many people to escape their debts... spread by word of mouth and television advertising from bankruptcy advisers."

KPMG highlighted the boom in Individual Voluntary Agreements (IVAs), arrangements made between debtors and their creditors to pay back around a third of their debts over a finite period, typically five years. IVAs ensure the creditors receive some money back and allow the debtor to stave off the full shame and restrictions of bankruptcy.

KPMG believes 10,000 IVAs were arranged during the first three months of this year, more than three times as many as during the same period of last year.

...is the the easy way out then? :ph34r:

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Bankruptcies soar to new peak

By Robert Watts

(Taken from: The Telegraph - 30/04/2006)

A potent combination of Britain's £1 trillion debt mountain and a relaxation of the bankruptcy laws is forecast to drive a record 100,000 people to go insolvent this year.

Bankruptcy experts expect the Government will on Friday reveal that 23,000 people became insolvent in the first three months of this year, 2,500 more than in the previous three months and the highest number in any quarter since records began in 1987.

"The situation is deteriorating rapidly, far faster than we expected," said Vicky Redwood, of Capital Economics, the City consultancy.

Insolvencies have been rising steadily ever since the Government made the penalties for bankruptcy less onerous with the 2002 Enterprise Act.

Before people get to excited about these numbers i would look at how sneaky and crafty some of these bankrupts are. Allthough many will be hard working people that just fell on hard times, most will be lazy little ponces that want something for nothing, they will be the same type of people that probably screwed the welfare system as well.

Houses will be put under the name of the partner, infact everything that needs to be wiped clean from the slate will be put under the name of the bankrupt, and most probably there will be a nice stash under the floorboards that came from the excessive borrowing.

Many will also go on one final binge before abusing this easy get out debt easy card.

Sam

Mark Sands, the head of personal insolvency at KPMG, said: "Bankruptcy is becoming a lifestyle option for many people to escape their debts... spread by word of mouth and television advertising from bankruptcy advisers."

KPMG highlighted the boom in Individual Voluntary Agreements (IVAs), arrangements made between debtors and their creditors to pay back around a third of their debts over a finite period, typically five years. IVAs ensure the creditors receive some money back and allow the debtor to stave off the full shame and restrictions of bankruptcy.

KPMG believes 10,000 IVAs were arranged during the first three months of this year, more than three times as many as during the same period of last year.

...is the the easy way out then? :ph34r:

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Some of you may not like it, but I have no problem whatsoever with individuals doing this.

The banks are not your friend. Most of you have watched the Money Masters video, you know how it all works.

I have worked hard in the private sector, got to a level with good pay only to have the carpet pulled from under me by the central and subsidiary banks making credit available to every lazy ****** without a job.

The up-shot of this tide of cash is of course rampant asset inflation which has virtually evaporated all the benefits of working.

Wage inflation is non-existent. Real inflation is out of control. We are lied to daily by our corrupt greedy government. We work for companies who constantly tighten the thumb screws on their employees. And we still can't identify the real enemy, but rather point the finger and fight amongst ourselves.

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Well yes it is the easy way out and so many people I know are doing it, it is absolutely ridiculas, there's no shame what so ever.

There will be a price to pay for this. Banks are going to have to get used to rising bad debts, and when this happens, they will need higher returns to compensate for the risks.

Market interest rates will rise, irrespective of what the BoE wants.

I'm actually going to enjoy watching this little game from the sidelines.

People will not believe how quickly this economic "miracle" went wrong.

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There will be a price to pay for this. Banks are going to have to get used to rising bad debts, and when this happens, they will need higher returns to compensate for the risks.

Market interest rates will rise, irrespective of what the BoE wants.

I'm actually going to enjoy watching this little game from the sidelines.

People will not believe how quickly this economic "miracle" went wrong.

from where I'm looking it appears to be the savers that are suffering i.e. cuts in savings rates

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I know a friend of a friend who managed to get himself £46k in debt and is now bankrupted.

i understand it began with credit cards at uni (ended up with about 9) and then a graduate loan - eventually he was just using credit to pay off his monthly installments so it had to end in tears.

both the banks and that guy are to blame for letting that situation happen - but if you had £46k of bad debt would you choose to spend the next 25 year paying it off or go through bankruptcy? I think he got a good deal and hopefully this trend towards bankruptcies will encourage the banks to become tighter with their lending criteria.

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Wasn't my prediction smack on, back in October last year.

http://www.housepricecrash.co.uk/forum/ind...40entry285740

HPC Regular

***

Group: Members

Posts: 527

Joined: 23-October 04

From: Southampton

Member No.: 664

QUOTE(deano @ Dec 17 2005, 04:51 AM) *

I thought it was a good time to pull this thread up again in light of the icWales: 'Post-Christmas debt crises looms' headline.

Link

http://icwales.icnetwork.co.uk/0300busines...-name_page.html

'I got it wrong then, if 20,000 bankruptcies are expected in Q1 2006 then total for 2006 would be 80,000 neglecting exceleration. Next year will be the big bust up year I think. This neglects the VIA's which as I have said is a nicer word for bankruptcy. There are more VIA's than bankruptcies as well.'

Replying to my own post from December 17th when 20,000 were expected to go bust in Q1 2006. We now have that many in Q4 2005 officially. The Q1 figure is going to be very much higher and I now predict at least 25,000 in Q1 2006 making for a annual rate for 2006 of 100,000 a year neglecting acceleration. In reallity its going to be a lot higher than that. This really is going to be one hell of an upset.

Edited by deano

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Some of you may not like it, but I have no problem whatsoever with individuals doing this.

You might not be so keen when you realise it is all of us who will pay the price for this though...

Those bad debts just don't _go away_ when someone is made bankrupt.

It's not only banks who are their creditors, many small businesses suffer too.

That unpayed money ripples through the economy and hits us with higher bills ultimately and probably will lower our savings through inflation.

So think about this again, why should we pay for the buying binges of a bunch of greedy idiots?

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Insolvencies have been rising steadily ever since the Government made the penalties for bankruptcy less onerous with the 2002 Enterprise Act.

Mark Sands, the head of personal insolvency at KPMG, said: "Bankruptcy is becoming a lifestyle option for many people to escape their debts... spread by word of mouth and television advertising from bankruptcy advisers."

KPMG highlighted the boom in Individual Voluntary Agreements (IVAs), arrangements made between debtors and their creditors to pay back around a third of their debts over a finite period, typically five years. IVAs ensure the creditors receive some money back and allow the debtor to stave off the full shame and restrictions of bankruptcy.

isn't this another example of this governments trendy trend of not letting people be responsible for their own stupidity, rather sit back, wash their hands of all blame & let somebody else deal with all the flak.

It obviously will affect all those who continue to pay taxes & save as they are the only targets there are to recoup losses.

I also have a sneaky suspicion that a large number of these clods will appeal for social housing 'cos it ain't my fault' & then aspire to be long term benefit claimants 'cos it ain't worth me working'.

I do so hope my cynicism is unfounded.

As an afterthought, maybe stupidity is the wrong term, perhaps these individuals are being extremely clever in living the good life then opting out with guaranteed safety net?

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``Some of you may not like it, but I have no problem whatsoever with individuals doing this.

The banks are not your friend. Most of you have watched the Money Masters video, you know how it all works.

I have worked hard in the private sector, got to a level with good pay only to have the carpet pulled from under me by the central and subsidiary banks making credit available to every lazy ****** without a job.

The up-shot of this tide of cash is of course rampant asset inflation which has virtually evaporated all the benefits of working.

Wage inflation is non-existent. Real inflation is out of control. We are lied to daily by our corrupt greedy government. We work for companies who constantly tighten the thumb screws on their employees. And we still can't identify the real enemy, but rather point the finger and fight amongst ourselves.``

Dom,great post may I say.Nothing much to add except that the lending institutions have gone totally bonkers.My nephew who earns around £700 a month take home has just been lent £15k for a car[insurance is £2k a year].He won`t listen to sense.Wonder if the bank will get their cash back------doubt it.

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Date: 14th August 2006.

http://news.bbc.co.uk/1/hi/business/4797379.stm

Well the article virtually admits to being goverment VI and assumes no recession between now and 2009 :lol: .

There figures are clearly well off the mark, if 26000 have gone bust in Q2 2006 how the hell will only 28000 be going bust in Q1 2009 when total debt burden is growing at 10%. Have these people even got a basic feel for these figures.

Under there last prediction, Q1 2006 bankruptcy's would be 20,000, well I bet they missed that one when Q2 2006 is 26,000.

My prediction of 130,000 to 160,000 bankruptcy's in 2006 is on course, I may have over-estimated by 20,000 at the low end but I'm still closer than they are.

Edited by deano

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from where I'm looking it appears to be the savers that are suffering i.e. cuts in savings rates

Banks that lend to responsible people will be able to offer higher rates on savings and will therefore attract more money to invest. That's how it should work, anyway...

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Once it starts to threaten banks profitability you can bet that the government will change the bankruptcy laws back again- but this time making them a lot more unattractive and draconian.

Everyone racking up debts and then walking away from them won't be tolerated for long.

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http://uk.biz.yahoo.com//08092006/214/grow...-year-high.html

Friday September 8, 04:55 PM

Growth of CCJs reaches 16 year high

LONDON (ShareCast) - The number of people having County Court judgements against them has risen at its fastest pace for 16 years.
The Registry Trust said 165,000 people received CCJs in the second quarter, up 18% or 25,000 on the same period last
year. It is the largest rise since 1990, when mortgage repossessions peaked.
The average CCJ was for £2,386 in the last quarter, up from £2,155 for the same period last year.
Malcolm Hurlston, chairman of the Registry Trust, said, "The rise in the number and value of consumer CCJs is proof of their concerns about the performance of the credit economy."
However the number of CCJs against businesses rose at a much slower rate of 4% to 45,515.

The air is leaking out of Gordon's bubble. He can't have much more than 90 days or so to get into No. 10 or its all over. Bookies have halved his odds already:

http://uk.news.yahoo.com/08092006/323/bad-...nabe-brown.html

Bad day at the bookies for PM wannabe Brown
AFP Friday September 8, 02:48 PM
By Robin Millard
LONDON (AFP) - Gordon Brown is the bookmakers' hot favourite to take over from Tony Blair as prime minister -- but he should be worried that his odds have lengthened, bookies have said.

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Date: 14th August 2006.

http://news.bbc.co.uk/1/hi/business/4797379.stm

Well the article virtually admits to being goverment VI and assumes no recession between now and 2009 :lol: .

There figures are clearly well off the mark, if 26000 have gone bust in Q2 2006 how the hell will only 28000 be going bust in Q1 2009 when total debt burden is growing at 10%. Have these people even got a basic feel for these figures.

Under there last prediction, Q1 2006 bankruptcy's would be 20,000, well I bet they missed that one when Q2 2006 is 26,000.

My prediction of 130,000 to 160,000 bankruptcy's in 2006 is on course, I may have over-estimated by 20,000 at the low end but I'm still closer than they are.

I got this off creditaction.org

One person is falling victim to insolvency every minute of the working day - 26,021 people became insolvent between April to June 2006 which is a 66% increase on the same quarter last year. The number of people becoming insolvent in 2006 is likely to exceed 100,000.

Well on course to see my prediction of over 100,000 insolvency's in 2006.

Link to Graph: Up Up and away!.

http://www.housepricecrash.co.uk/graphs-in...nsolvencies.php

Edited by deano

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I'm bringing this old debt thread to top of stack again because of its current relavency. Be carefull to note the dates when reading it, it was mainly written during 2006.

This one below was from August 2006, I have now commented at the bottom of post.

Date: 14th August 2006.

http://news.bbc.co.uk/1/hi/business/4797379.stm

Well the article virtually admits to being goverment VI and assumes no recession between now and 2009 :lol: .

There figures are clearly well off the mark, if 26000 have gone bust in Q2 2006 how the hell will only 28000 be going bust in Q1 2009 when total debt burden is growing at 10%. Have these people even got a basic feel for these figures.

Under there last prediction, Q1 2006 bankruptcy's would be 20,000, well I bet they missed that one when Q2 2006 is 26,000.

My prediction of 130,000 to 160,000 bankruptcy's in 2006 is on course, I may have over-estimated by 20,000 at the low end but I'm still closer than they are.

Comment.

Quote:

'There figures are clearly well off the mark, if 26000 have gone bust in Q2 2006 how the hell will only 28000 be going bust in Q1 2009 when total debt burden is growing at 10%. Have these people even got a basic feel for these figures.'

Well now we know that 30,000 will go bust in Q1 2007, like I said who's doing the calculations. Do they still think 28,000 will go bust in Q1 2009. more like 280,000. Thats not a prediction, its sarcasm.

Edited by deano

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Being as it's so easy to rack up massive debt and then walk away from it, it's almost tempting purchase a sh!t load of silver or gold on CC's, bury it somewhere and then declare bankruptcy and cash in when the depression sets in :blink:

Edited by Lander

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Being as it's so easy to rack up massive debt and then walk away from it, it's almost tempting purchase a sh!t load of silver or gold on CC's, bury it somewhere and then declare bankruptcy and cash in when the depression sets in :blink:

Could be the start of a whole new religion- Born Again Bankrupts.

After twelve months, find the gold again with the help of a divining rod and declare a miracle.

Saint Lander. I like the sound of that.

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Could be the start of a whole new religion- Born Again Bankrupts.

After twelve months, find the gold again with the help of a divining rod and declare a miracle.

Saint Lander. I like the sound of that.

B)

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It doesn't matter how many go bust so long as lenders profits remain strong and business keeps flowing though the doors.

The money is spent into the economy, ends up paying interest one someone who won't default loan, or in their deposit account.

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The big question is, how will this affect the banks attitude to lending with regards to housing?

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