A record number of people were declared insolvent last year as the recession pushed many homeowners and businesses into the red, new figures revealed today. Across England and Wales, 134,142 people went bankrupt, took out an Individual Voluntary Arrangement or Debt Relief Order in 2009, the Insolvency Service said. This dwarfs the previous record of 107,288 personal insolvencies from 2006. Experts believe this had already been passed by October last year.
Total company liquidations reached 19,077 during 2009, the highest figure since 1993. But the number for companies in the final quarter of the year was lower than both the previous three months and the same quarter of 2008. In contrast, the level of individuals declared insolvent continued to speed up in the last quarter at 35,574 – the highest since records began in 1960.This is a 25 per cent rise on the figure for 2008 and the eight consecutive quarter where the tally has increased.
A breakdown of the total number of insolvencies for the final three months of 2009 showed 17,007 people went bankrupt, 7 per cent fewer than in the previous quarter. But a record 13,219 people took out Individual Voluntary Arrangements, under which interest on debt is frozen in exchange for a set amount being repaid each month. It is thought IVA numbers were boosted by companies cutting staff pay and overtime as an alternative to making redundancies, meaning people were in a position to repay some of what they owed, rather then being forced to declare themselves bankrupt.
There was also a further increase in the number of Debt Relief Orders taken out in the three months to the end of December, with these rising to 5,348, up from 4,505 in the previous quarter. Both chapter 7 bankruptcy and chapter 13 bankruptcy therefore continue to rise.
As consumers across the land continue to struggle, we continue to look for signs that an economic recover is at hand, budding, and springing forth.
Filed under Uncategorized by on Feb 6th, 2010. 
Bankruptcy is the kind of topic that few people know very much about unless they file for bankruptcy or are somehow involved in the bankruptcy arena for a living. However, if you ever get to the point where you are considering filing for bankruptcy protection, understanding the most commonly asked bankruptcy questions is crucial.
Q. If I file for bankruptcy will I lose my home?
A. Probably not. But the answer depends on the particular laws in the state where you will be filing for bankruptcy protection. Although Chapter 7 bankruptcy involves the surrender of all assets to a trustee, there are a number of state and federal exemptions that allow bankruptcy debtors to keep their homes. If you don’t have any equity in your home, it has no value to a bankruptcy trustee and will not be seized. In Chapter 13 bankruptcy, debtors keep all their property in exchange for a 5-year payment plan distributed to their debtors.
Q. Can I lose my job because I filed for bankruptcy?
A. Absolutely not. Federal laws are on the books that prohibit employees from treating an employee any different from another simply because of a bankruptcy.
Q. Will bankruptcy ruin my credit standing?
A. Probably. Bankruptcy is the worst mark you can have on your credit report and will cause your credit score to take a dive. But most people already had significantly damaged credit before they even filed for bankruptcy. That’s because many people are already behind on credit card and mortgage bills when they decide to file bankruptcy. That means their credit rating has already taken a significant hit. The good news is that most people can get a credit almost immediately after bankruptcy and a car loan 6 months to a year later.
Q. Will everyone know I filed for bankruptcy?
A. It depends. Bankruptcy records are available for anyone to view in the local federal courthouse. Some newspapers print the latest bankruptcies in the community on a weekly or month basis. While bankruptcy records are not private, someone must know your name in order to look up your bankruptcy filing. So if you don’t mention your bankruptcy to anyone, the chances are very good that no one will know.
Q. Will filing for bankruptcy stop the calls and letters from creditors?
A. Yes. A key section of the bankruptcy law includes an automatic stay that is granted to bankruptcy filers as soon as the bankruptcy petition is filed. Creditors who continue to call after being notified of the bankruptcy should be referred to your lawyer, which will generally stop by all the harassing calls.
Q. Is there a chance my bankruptcy case will not be accepted?
A. Yes, but that is only in the smallest minority of cases. Statistics show that about 70 percent of all individual bankruptcy cases are Chapter 7 filings. While greater scrutiny of Chapter 7 cases has been in place since the 2005 changes to bankruptcy laws, about 90 percent of all Chapter 7 cases are accepted and eventually discharged. Most of the rest are rejected and then refilled as Chapter 13 cases. The only Chapter 13 cases dismissed by the court are those that involve fraud or abuse.
Understanding the answers to these bankruptcy questions can be essential as you decide whether or not to proceed with a bankruptcy case. Only rely on advice from a lawyer trained in the bankruptcy field.
Filed under Uncategorized by on Jan 27th, 2010.
Whenever anyone finds themselves in financial problems, the tendency is to cover it up and not to tell anyone. This can be detrimental to the family, of course, and merely ignoring the problem will not make it go away. If this does happen, getting debt relief may be the only answer. For those who decide to file bankruptcy, there are lawyers who will be able to lead the way through the legal maze.
Of course, going to great lengths to stay out of the court is probably the best way to deal with creditors. However, when all else fails, filing for Chapter 7 or Chapter 13 debt relief will give some respite and it is not always necessary to lose all that the family has built up.
Chapter 7 is good for those people who have a lot of credit card debt or debtors who are harassing them. What the court does is to do a means test on the family. Any normal and not excessive expenses are taken into account and if there is a shortfall, the court will literally wipe out these creditors in one fell swoop.
If the family has some excess income over expenditure, then the court will file for Chapter 13. This means that the court will amalgamate all the money owed and work out a set payment plan. The good thing is that the debtor will now pay off the amount owed in a structured way and will no longer pay interest or be penalized for late payments etc.
Merely approaching the creditors to try to work out a payment scheme is not really workable since not all the creditors will want to go this route. However, putting it in court will mean that they do not have a choice.
This may seem like anyone owing money is getting off lightly. However, this is really not the case since they will only be able to avail themselves of this service once every eight years or so. Repeat offenders will also not be entertained so well with the court because the idea is that they start to learn how to live within the parameters of their budgets.
Once the court has become involved it will stop anyone from harassing the person owing money. No more threatening letters or bailiffs coming to the door. This gives some much needed respite for those who are unfortunate enough to find themselves in this position.
Filed under Uncategorized by on Jan 25th, 2010.
Bankruptcy lawyers – the lousy rats. They and their silly, ridiculous “Ghostbuster” style commercials – “We’re ready to believe you!”. Really, they have no shame. They would have you believe that bankruptcy is the pot of gold at the end of debt rainbow, the light at the end of the debt tunnel, the fairy godmother of your Cinderalla in debt tale.
Puh-lease.
Bankruptcy is akin to personal financial suicide. It destroys one’s credit and credit worthiness. It causes more damage than 2 sumo wrestlers going toe to toe in a crystal vase shop. What a sight that would be on the evening news.
Rather than promoting bankruptcy, I would like to make you aware of bankruptcy alternatives. These are debt relief programs that get rid of debt like gangbusters. Credit card debt is what it is – a fact of everyday life. Unless you prefer to keep a stash of dollar bills under your mattress or in a shoe box buried in your backyard, chances are you have a credit card and some amount of credit card debt.
Avoid bankruptcy – this is what we should be trying to do at all costs. So let’s discuss here in digital print why. As we mentioned, your credit score – you can kiss it bye bye if you file for bankruptcy. You can also expect the stain of a bankruptcy filing to stay on your credit record longer than a glass of merlot spilled on a white bear rug.
If you have the need to order new home utility service in the future such as gas, electric, water, internet, cable, phone – you can expect to be required to pay hefty deposits in order to get that service.
Thinking about renting an apartment? Think again. You will be denied based on your bankruptcy filing and your pitiful credit score. Folks, your average major league pitcher would have a higher batting average than the credit score of a person who files for bankruptcy.
What did that funk song from the 70’s say? … “How Looooow can you go? How Looooow can you go?” You feel me?
Like there is no WAY your credit score could get any lower.
Debt Relief – it doesn’t have to be some John Mellencamp “Hurt So Good” kind of thing. it doesn’t have to cause harm to have some minimal benefit.
The true debt relief programs that help without causi ng harm include debt settlement, debt consolidation & debt consolidation loans, as well as consumer credit counseling.
If you or someone you know are struggling with credit card debt, jump online and research these programs. And never, ever get involved with bankruptcy…
or a bankruptcy lawyer for that matter. But that’s another story.
Filed under Uncategorized by on Jan 6th, 2010.
