crash 2005 Posted May 4, 2007 Share Posted May 4, 2007 (edited) http://news.bbc.co.uk/1/hi/business/6623465.stm More than 30,000 people became insolvent in England and Wales during the first three months of 2007, a new record, official figures show. This is an increase of 23.9% on the same three month period in 2006, the government's Insolvency Service said. However, the rate of increase in insolvency is starting to slow. It seems lenders are taking a tougher stance with debtors looking to enter Individual Voluntary Arrangements (IVAs), a type of insolvency. The number of people entering IVAs in the first quarter was up only 4.7% on the previous three month period. Edited May 4, 2007 by crash 2005 Quote Link to comment Share on other sites More sharing options...
tahoma Posted May 4, 2007 Share Posted May 4, 2007 In other words, lenders are refusing to give people back their balls in a jar quite so easily. IIRC companies like Debt Free Direct took a share price hammering on this crack down in IVAs. Quote Link to comment Share on other sites More sharing options...
mbga9pgf Posted May 4, 2007 Share Posted May 4, 2007 In other words, lenders are refusing to give people back their balls in a jar quite so easily. IIRC companies like Debt Free Direct took a share price hammering on this crack down in IVAs. YEah, and they laughed it off... share price is back up to 360p as of yesterday... Investors know IVAs are a licence to print money, and all the tougher stance did was take out the pikey smalltime competition for DFD... Lets put it this way, your monthly take home can only get eroded so much with IR rate rise... you are a professional that cant get made bankrupt or you will lose your pro status at work, but have a lot of cc debt, what do you do? Get an IVA of course. I dont approve of it, but as long as it remains legal (which it will, there will be blood on the streets if IVA legislation is toughened and professionals get turfed out onto the streets, admittedly through their pown foolishness) I will be an investor. Call me a VI if you like I dont care!!! I have already made 4K on DFD.l Shares since the crash! Quote Link to comment Share on other sites More sharing options...
BudoBear Posted May 4, 2007 Share Posted May 4, 2007 (edited) Ooops! People overspending? In this country? Surely not! edit: lashed it up first time around! Edited May 4, 2007 by BudoBear Quote Link to comment Share on other sites More sharing options...
BudoBear Posted May 4, 2007 Share Posted May 4, 2007 Shouldn't the title read: Broke News On BBC Quote Link to comment Share on other sites More sharing options...
Leonard Hatred Posted May 4, 2007 Share Posted May 4, 2007 Will this increase in supply give us a "bankrupt people crash"? Quote Link to comment Share on other sites More sharing options...
Orbital Posted May 4, 2007 Share Posted May 4, 2007 the same article in the paper went on to explain how the number is expected to drop in the future thanks to tightening regulations. Not that I want to rain on the HPC parade or anything... Quote Link to comment Share on other sites More sharing options...
dude wheres my house Posted May 4, 2007 Share Posted May 4, 2007 the same article in the paper went on to explain how the number is expected to drop in the future thanks to tightening regulations. Not that I want to rain on the HPC parade or anything... Then they wont be able to go insolvent, they will have to go BANKRUPT (i.e. kicked out of their hosue instead of a slap on the wrist) Quote Link to comment Share on other sites More sharing options...
Cogs Posted May 4, 2007 Share Posted May 4, 2007 YEah, and they laughed it off... share price is back up to 360p as of yesterday... Investors know IVAs are a licence to print money, and all the tougher stance did was take out the pikey smalltime competition for DFD... Maybe this is an urban myth but I was under the impression that IVAs were supposed to be for the benefit of entrepreneurs, to encourage people to take the risk of starting/running a small business in a country that was at the time the legislation was suggested, was perceived as being rather punitive towards small businessmen compared with our competitors in terms of the risks posed by failing. In the US you get knocked down and you get up again, in the UK it seemed you got knocked down and it ruined your life for good. This is one thing that really annoys me about the present government. I would describe myself as a smidgeon left of centre and I agree in principle with many of their policies if they are targeted very narrowly. The problem is New Lab are neither fish nor foul so what happens is they lose their nerve and extend many benefits towards the middle class to pay them off, in effect, for helping the most needy in society and the whole thing turns into pigs at the trough time. The middle class are not actually better off for this exercise as it would have been better if they'd kept the cash, all that happens is government expands and interferes in our lives more. An example of this was parenting centres (childcare of some description) introduced into poor areas to help. The poor people never got a look in as yummy mummies piled into their people carriers and drove down and oversubscribed the places the minute the doors opened. The people it was aimed at are a bit shy of such things (the stench of social workers and benefits snitches perhaps) and advertising, persuasion etc. were factored into the budget but of course was completely wasted. Zero social improvement, middle classes forced to in effect procure from the state, another New Lab initiative fails. The IVA racket sounds like more of the same. And the worst thing is that presumably as it is cracked down on many legitimate business people that we need to "have a go" are going to end getting the sharp end of the stick and it will all have been a complete waste of time. Quote Link to comment Share on other sites More sharing options...
deano Posted May 4, 2007 Share Posted May 4, 2007 (edited) The article states that debt aquisition is flat. Not according to this months credit action its not. http://www.creditaction.org.uk/debtstats.htm Something I've just noticed is that the rate off usecured debt aquisition at 5.9% is not far ahead of unsecured debt write off. What happens when they reach equilibrium. At that point all further debt aquisition at the top is written off at the bottom. The banks can't then increase total lending. If write off exceeds further lending the total debt starts reducing while the banks are still lending. Thats absolutley mad. Edited May 4, 2007 by deano Quote Link to comment Share on other sites More sharing options...
Wannabe Posted May 4, 2007 Share Posted May 4, 2007 BANG!!! Quote Link to comment Share on other sites More sharing options...
Dubai Posted May 4, 2007 Share Posted May 4, 2007 "However, the concern is what happens when rates rise? Half a percentage point rise in rates would add £60 a month to a £150,000 repayment mortgage that could well push many people into insolvency." I find it incredible that people can take on debt of such a magnitude if 60 quid a month could tip them over into insolvency. Why would anyone leave such a tight margin before signing on the dotted line? Quote Link to comment Share on other sites More sharing options...
OzzMosiz Posted May 4, 2007 Share Posted May 4, 2007 "However, the concern is what happens when rates rise? Half a percentage point rise in rates would add £60 a month to a £150,000 repayment mortgage that could well push many people into insolvency." I find it incredible that people can take on debt of such a magnitude if 60 quid a month could tip them over into insolvency. Why would anyone leave such a tight margin before signing on the dotted line? err cos they don't want to miss the boat? They should've stayed on dry land and waited for the water levels (house prices) to fall before getting on that rocky boat! Quote Link to comment Share on other sites More sharing options...
mbga9pgf Posted May 4, 2007 Share Posted May 4, 2007 The IVA racket sounds like more of the same. And the worst thing is that presumably as it is cracked down on many legitimate business people that we need to "have a go" are going to end getting the sharp end of the stick and it will all have been a complete waste of time. MAybe a little left of Stalin?!?! Talk about socialist utopia or what!!!! The competition I was talking about was the other less reputable IVA firms who were telling individuals that if they didnt like their debt no more, why not get an IVA? DFD never did this and never will. DFD proves a way out for professionals who have gotten into too much debt, as a result of their own bl00dy foolishness, and lets them pay back a SIGNIFICANT chunk to the lender. You are right about the legislation though, it was originally meant for business start-ups and entrepreneurs, however, I believe it was the ownership of DFD that realised the legislation could also, perfectly legally, fit the over endebted consumer as well. They have a best advice model, which means they only will arrange an IVA if they believe the individual will complete over the 5 years. The completion rate is one of the stats the bank is most interested in, as this is the one that will garantee the most money back for them. What could the government do? They couldn't toughen legislation just because the banks didnt like it (and in a way, its the governments way of saying to the banks, "don't over-lend, because if you do, you WILL lose some of your capital as a result of an IVA"). If you look at today's Express, who is getting blamed for over-lending? The banks? The individual that signed his/her life away? Nope The government. In many ways, I completely disagree with the principles behind IVA's, being a conservative and feeling these greedy sods should hang their heads in shame for getting into serious debt in the first place (and face a jail term, like you used to). But then again, I think s0d it, I like the profit I am making on my shares too much to let morality get in the way. Plus, Lets face it, if you had to spend every single disposable penny of income for 60 months yes, 5 YEARS on your IVA, its going to make you think twice about going on a consumer binge any time again in this life time isn't it? Quote Link to comment Share on other sites More sharing options...
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