There’s been a lot of news lately, so here’s my update for August 2008…

The latest insolvency statistics have been released recently. There were 24,553 individual insolvencies in England and
Wales in the second quarter of 2008 on a seasonally adjusted basis. This was a decrease of 2.0% on the previous quarter and a decrease of 8.3% on the same period a year ago. 

This was made up of 15,297 bankruptcies, a decrease of 1.3% on the previous quarter and a decrease of 5.7% on the corresponding quarter of the previous year, and 9,256 Individual Voluntary Arrangements (IVAs), a decrease of 3.2% on the previous quarter and a decrease of 12.4% on the corresponding quarter of the previous year.

A year after the credit crunch with talk of recession, doom and despair, these figures may seem at odds with the rest of the economic indicators. I believe, however, this is a false dawn and things are going to get a lot worse before they get better. Allow me to elaborate ….. 

Last year saw a fundamental shift in creditor attitudes to IVA’s with the bar being raised from a minimum of 25p in the pound to 40p in the pound. In addition, with the banks’ balance sheets still under pressure after the credit crunch, banks are trying to keep as much debt as possible on their balance sheets, so more people are being pushed toward debt management plans. 

With bankruptcy still publically misunderstood and many people not able to make the 40p in the pound minimum for IVA’s (whereas 25p in the pound would have been achievable), the only perceived option is debt management plans. It is more than likely that this is a time bomb waiting to go off. 

Debt management plans, although regulated, do not afford any extra legal protection for the debtor. There is no legal requirement for the creditors to accept reduced payments or freeze interest. In addition, the creditor at any time can decide that enough is enough and demand payment in full. It is not uncommon for people to go into a long term debt management plan and end up owing more money than when they started. 

A lot of people are currently using debt management plans as a short-term holding pattern whilst waiting for economic recovery and the heady days of cheap borrowing and rocketing house prices. With house prices already haven fallen 9% since their peak last year (with no end in sight), and borrowing getting ever harder to obtain for everyone, this clearly cannot go on for ever. 

It is more than likely that it will be another 18 months before any significant signs of recovery make their presence known. So what’s likely to happen now? I would fully expect a sharp rise in quarter 4 of this year, with 100,000+ bankruptcies in 2009 a probability rather than a possibility. 

Where does this leave the individual who is struggling now in the hope things are going to get much better soon? The simple answer is, the longer the delay in getting your financial situation sorted, the worse things are likely to be. The best advice is that if you find yourself struggling, seek expert help now. The sooner you face up to the truth, the more options that will be available. 

As a discharged bankrupt myself, I understand the thought processes in the run up to bankruptcy. It is far easier to ignore the problem as that “blue-sky” deal that will solve all your problems is just around the corner. It rarely happens, so the sooner you admit the true extent of the problem to yourself, the more time you have to do something about it.  

It is also worth noting that creditors will generally be as helpful and supportive as possible if you speak to them as soon as you realise there is a problem. If you miss a few payments and ignore all their attempts at contacting you, it is more than likely they’ll lose patience and throw the book at you. Been there, done that! 

Anyone who is concerned they are heading for financial meltdown should feel free to post questions on our forum or call the helpline. You are not alone and there is help out there …. You just need to ask!

Like our sister site www.IVA.co.uk we will soon be organising our own events page, however I would like to draw your attention to the up and coming Debt Debate at Browns Court in London on Friday the 2nd of May at 4:00pm

The topic of this Debt Debate is very exciting covering the controversial IVA’s up against Bankruptcy…

The Debate will highlight the key issues surrounding both solutions, discussing the pros and cons of both and posing questions about how both solutions are portrayed in the media.

The panel for the debate will include Melanie Giles who posts as an expert on this site.

You can use the link below to register your interest in attending the debate and I look forward to meeting those of you who attend

                                                              http://www.iva.co.uk/events/debt_debates.asp

My update falls a little late this week so apologies for this. 

Firstly I would like to extend a warm welcome to Melanie Giles, to our panel of experts, Melanie has been in the industry for over twenty years and brings a vast wealth of knowledge to the forum.Melanie is a forum expert on our sister site www.IVA.co.uk  and for over a year has been helping people in financial difficulty by giving advice and answering questions.We thank you for taking time out of your schedule to post on the Bankruptcy site as well as the IVA site. 

Further to my update on the 20^th March the forum has continued to grow and the number of new members and questions is, as I mentioned in my last update, down to the panel of experts like Melanie who are on hand to answer your questions and give advice so a big thank you to all the experts. 

After some initial teething problems our Blogs are now up and running so I would like to invite you all to share your own stories and experiences so that others may learn and draw comfort that they are not alone in the battle through their difficult times. 

I will be updating my Blog weekly with updates to the site and forum as well as up and coming events and industry news.

My first week as spokesperson involved an overhaul of the Bankruptcy Help website to ensure that all information given on the site was been brought up to date. 

There have been many changes made firstly you will note our updated front page to include my personal profile and introduction on Bankruptcy TV.Other changes as I have previously mentioned were within the Bankruptcy information Centre bringing this up to date. 

You will notice at the top of the page the Bankruptcy Helpline is now fully functional for those of you who have questions on your personal situations, the helpline is a free advisory service supplied by the Bankruptcy Help Team. 

The team are there to answer your questions and give you advice on the best course of action for your particular problem, They will run through your personal situation asking questions regarding your income and expenditure, property status, and debt levels and explain to you the steps you need to take. 

Alternatively you can fill in the information on our Bankruptcy Wizard, the wizard calculates your disposable income, against your personal debts and calculates a suggested course of action based on the information given. 

You can also post a question on our forum where our forum experts will endeavour to answer your questions and give advice on the best course of action for you.The experts on our forum are independent specialists in their fields, who have taken time from their busy schedules to post on the forum, for which we are extremely grateful.  

The first three moths of 2008 has seen 138 topics on the forum with 695 posts, compare this to the whole of 2007 which saw 138 topics and only 357 posts, and you can see the popularity of the forum is growing, the most staggering fact is March generated 96 topics with 571 posts where February only generated 21 topics with 62 posts.

This vast growth in number is down to our two main experts Paul Johns of Reviva UK and
Brett England of England, Jackman & Spacey without whom your questions would go unanswered, so a big thank you to the both of you

 

I have many exciting updates to bring you over the up and coming weeks whereby I will be giving a weekly forum update as well as updating my blogs and articles on the site to keep you all posted on our developments.