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The Masked Tulip

Record Numbers Go Bankrupt As Debt Mountain Builds Up

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Record numbers go bankrupt as debt mountain builds up

FEARS over the rising toll from Britain’s £1 trillion mountain of personal debt grew yesterday as the number of people sliding into bankruptcy soared to a record and tens of thousands more faced the threat of losing their homes.

Leading accountants joined politicians to sound warnings over the threat from a “what the hell” culture of “spend now, worry later” as the number of personal bankruptcies in England and Wales leapt to 23,251 in the first quarter, the highest number since the Sixties.

The latest steep increase in numbers of people crumbling under the weight of their debts marked a 13 per cent rise from the previous three months, and a 73 per cent increase from the same period a year earlier, the Department of Trade and Industry (DTI) reported. The first quarter total eclipsed the previous peak set at the time of the early Nineties recession.

Concern over the rising numbers of people tempted to sink too deep into the red to cope was heightened by other figures showing a surge in court actions by mortgage lenders to repossess homes.

“A growing buy-now, pay-later culture has led to seriously high levels of personal insolvencies,” Mike Gerrard, of Grant Thornton, the accounting group, said. He and other accountants predicted that the number of personal bankruptcies will top 100,000 this year — with 259 people a day becoming insolvent.

Pat Boyden, of PricewaterhouseCoopers, said.“We are paying the price of a spend-now, worry-later culture. Record personal insolvencies are the result of a debt culture which has become endemic in the UK.”

Already sharp increases in individuals going bust gathered pace in 2004 after the Government reformed the law to make it easier for people to choose to declare themselves bankrupt under so-called Individual Voluntary Arrangements (IVAs).

Amid warnings that potential increases in interest rates this year might only worsen the problems, concern over the implications for the economy was compounded by a parallel rise in the number of companies also going bust, to the highest quarterly figure in nearly three years.

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Where do the Editors and other Media leaders meet, wine and dine?

Slowly but surely the media are shifting the message.

Coupled with a Government looking somewhat "at sea".

Overall painting an image of a country out of control?

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A growing buy-now, pay-later culture has led to seriously high levels of personal insolvencies,” Mike Gerrard, of Grant Thornton, the accounting group, said. He and other accountants predicted that the number of personal bankruptcies will top 100,000 this year — with 259 people a day becoming insolvent.

...and jeff learned that things get a little more interesting when you say YES to a virgin credit card.

or

whats in your wallet ?

or

y'know. talking to those people at picture is so easy.

or

look at all the people just like you and me...with a heap of credit card debt. they just cant break free.

Edited by right_freds_dead

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We are supposed to be in an "economical miracle" period of high employment and low interest rates (or so the justification goes for higher house prices) yet there's a steep rise in bankruptcies.

I don't know whats wrong with these people, I was always taught to live within my means and only borrow when necessary for a tangible asset/benefit i.e. Mortgage, Car, education with a plan for re-payment and a safty net for crises times.

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i find it insane that:

a) lenders are so willing to lend so willingly(it wasn't like that when credit cards were first introduced) and

B) that people are soo willing to let themselves get into such terrible debt

i'm 29 and am amazed at so many of my friends whoso ignorant about debt and credit.

I'm so glad i have parents who entrenched it into my brain that if i want something I have to pay for it and that i should save for things(maybe it's my mother Jewish roots??!)

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Guest Charlie The Tramp

Where do the Editors and other Media leaders meet, wine and dine?

Slowly but surely the media are shifting the message.

Coupled with a Government looking somewhat "at sea".

Overall painting an image of a country out of control?

The media are now drip feeding the populace with the bad news, preparing them for the coming inevitable big bang. ;)

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Also take into consideration that 71% of the overall figure were under the age of 30 and within this age group the level has increased 400% so far this year! Which means a minimum of six years before they will be off the register.

Only then will they be able to apply for credit or a mortgage which means a reduced number of potential first time buyers over the next decade and as we all expect this is only the beginning.

Once interest rates eventually rise and a contraction of credit due to high levels of bad debt this number will no doubt escalate and could cause a very long drawn out trough in house prices for years.

Edited by bring_it_on

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Where do the Editors and other Media leaders meet, wine and dine?

Slowly but surely the media are shifting the message.

Coupled with a Government looking somewhat "at sea".

Overall painting an image of a country out of control?

I am convinced they all know what is happening, but that they are also property investors of some sort or another and are so short-sighted they think it is in their interest to keep talking the market up.

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I believe that this is a new cultural phenomenon amongst the under 25's in particular.

When the bankruptcy laws were changed and tested, the word has gone around a certain stratum in society, and they are prepared to deliberately max the debt then opt out of repayment.

There is no longer any stigma either within our out with their circle. In fact it is probably considered a savvy thing to do.

There is time to polish the image and their financial record a few years later, when they decide they need credit or a mortgage etc, and generally present a respectable image.

The banks must be aware of this but are prepared to take the risk because they make substantial profits overall. They penalise others to pay for the defaulters.

It is similar to cc transactions. The cost of the fraud is passed on to the retailer. This is why the banks have been slow to introduce new or effective technology. The bottom line is that they are still making huge profits so are not overly concerned about losses at the margins.

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I believe that this is a new cultural phenomenon amongst the under 25's in particular.

When the bankruptcy laws were changed and tested, the word has gone around a certain stratum in society, and they are prepared to deliberately max the debt then opt out of repayment.

There is no longer any stigma either within our out with their circle. In fact it is probably considered a savvy thing to do.

There is time to polish the image and their financial record a few years later, when they decide they need credit or a mortgage etc, and generally present a respectable image.

It might be that some may try serial bankruptcy.

Could work as a couple, stagger the bankruptcies?

Live for free.

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Live for free.

Speaking to bankrupt aquaintances who do not own businesses or houses, bankruptcy is a hoot. You rack up 100k debts, get to keep the stuff you've bought, are liable for only a fraction of the total debt and repay a fraction of it back monthly at a rate you can easily afford.

There are many loopholes and tricks a wily bankrupt can use to make it a rather good deal. People swear by it. Hardly any consequences that can't be overcome. It's easier to get credit and open bank accounts than the law suggests. Just lie. Don't declare you're a bankrupt when applying. No-one's the wiser.

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I'm so glad i have parents who entrenched it into my brain that if i want something I have to pay for it and that i should save for things(maybe it's my mother Jewish roots??!)

Ahem, I suggest you check your willy for any signs of Jewish roots! :blink:

I believe that this is a new cultural phenomenon amongst the under 25's in particular.

The under 25s have never known an economic slowdown let alone a recession. They never knew the 1980s. They will learn the hard way.

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FEARS over the rising toll from Britain’s £1 trillion mountain of personal debt grew yesterday...

It's not a £1 trillion mountain. That was in June 2004. It's now a £1.182 trillion mountain.

In case anyone thinks I'm being pedantic, the difference is approx £7500 of extra debt for every household in the UK.

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What has all that debt been spent on? Has it been paying our wages over the last few years? creating a so called healthy economy. When people stop spending borrowed/created money, or when that money is no longer handed out so easily, what will become of us?

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Reports circulating within the Media that the Government is about to issue a 'What to do in the event of a nuclear explosion' style pamplet for avian flu were today being discounted by Government ministers and senior civil servants. "This is simple preposterous," one Whitehall source is reported as saying...

...in the report, leaked to this correspondent, Government plans involve familes wrapping their dead relatives in plastic sheeting and storing the bodies in makeshift coffins. Options given for these are kitchen shelves and cupboards...

And you thought that this economic debt boom was accidental?

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But that debt mountain (equivalent to our GDP?) has given us enormous rewards - a rip-roaring, whopping great 2.4% annual growth rate. Woohoo.

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Speaking to bankrupt aquaintances who do not own businesses or houses, bankruptcy is a hoot. You rack up 100k debts, get to keep the stuff you've bought, are liable for only a fraction of the total debt and repay a fraction of it back monthly at a rate you can easily afford.

There are many loopholes and tricks a wily bankrupt can use to make it a rather good deal. People swear by it. Hardly any consequences that can't be overcome. It's easier to get credit and open bank accounts than the law suggests. Just lie. Don't declare you're a bankrupt when applying. No-one's the wiser.

If this is / or becomes widespread, I imagine a special squad will be set up by banks / fraud squad to catch & imprison them. The banks will need to make an example of them as a deterrent for others.

Bring on the bounty hunters like Truck Turner 1974 !- http://www.blaxploitation.com/m_13_9.html

I believe that this is a new cultural phenomenon amongst the under 25's in particular.

When the bankruptcy laws were changed and tested, the word has gone around a certain stratum in society, and they are prepared to deliberately max the debt then opt out of repayment.

There is no longer any stigma either within our out with their circle. In fact it is probably considered a savvy thing to do.

There is time to polish the image and their financial record a few years later, when they decide they need credit or a mortgage etc, and generally present a respectable image.

The banks must be aware of this but are prepared to take the risk because they make substantial profits overall. They penalise others to pay for the defaulters.

It is similar to cc transactions. The cost of the fraud is passed on to the retailer. This is why the banks have been slow to introduce new or effective technology. The bottom line is that they are still making huge profits so are not overly concerned about losses at the margins.

Bank charges have been capped to £12 I believe & sites like www.consumeractiongroup.co.uk exist to make the process of claiming some charges back over the last 5 years easy. This could hit the banks profits big time. Didn't 40% of the banks profits come from charges ?

Edited by Saving For a Space Ship

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all entirely predictable I'm afraid.

if you have maxxed out all the credit cards, loans etc do you either

A struggle on to pay it all back over 20-30 years

B declare bankruptcty and get out of all your debts and be out of bankruptcy within 1 year???

answers on a postcard please.

going bankrupt at least once in your lifetime will become the done thing (get a loan/credit card to pay off your student debt first though - student loans are exempt from bankruptcy)

Edited by Solvent Celt

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So if the IVA lifestyle becomes the norm what's to stop the banks from using that information in the future to say add 5% p.a. interest to the normal rate for any loan, CC etc for people who EVER have had an IVA before? That alreay happens with mortgages for those who can't get them from standard lenders?

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Surely Gordon has the position covered wit a "Rehabilitation of Bankrupts Act" where the record is wiped clean after 3 years? Otherwise how could he keep the HPI-MEW-Debt based Miracle Economy in perpetual motion?

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Guest Charlie The Tramp

In case anyone thinks I'm being pedantic, the difference is approx £7500 of extra debt for every household in the UK.

When it comes to serious debt you have to be pendantic. I remember a guy telling me once who moved up the property ladder taking on an extra £50k debt, what`s another £50k nothing these days :rolleyes: and that was 1988.

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When it comes to serious debt you have to be pendantic. I remember a guy telling me once who moved up the property ladder taking on an extra £50k debt, what`s another £50k nothing these days :rolleyes: and that was 1988.

And some of us were around a year later in 1989 to know what happened next :)

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Realistbear - you obviously have not had your economic memory wiped. Please proceed to brainwashing at the earliest opportunity. There was no house price crash, There was no house price crash, There was no house price crash...

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Guest Charlie The Tramp

Realistbear - you obviously have not had your economic memory wiped. Please proceed to brainwashing at the earliest opportunity. There was no house price crash, There was no house price crash, There was no house price crash...

There was no house price crash, my area 1989 selling at £120k, my area 2001 selling at £120k. Where was the crash? :unsure:

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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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