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What The Mail On Sunday Said
By: Nicola Bullimore
Anyone considering Bankruptcy may have experienced fear after reading an article
written in The Mail on Sunday with the headline “Bankruptcy cheats face
crackdown”. But, how much of what was written was in context of the reality of
Bankruptcy as it is today?
The article implied that since The Enterprise Act 2002 the rise in the number of
people going bankrupt was due to them using the Bankruptcy route as a “Get out
of jail free card”. The assumption being that The Enterprise Act 2002 made
bankruptcy an easy option. However, the writer didn’t take into consideration
the actions the DTI have taken to raise financial awareness and to ensure better
advice is given regarding people’s options when faced with personal debt issues.
The article gave the impression that one of the restrictions of bankruptcy was
that you could not open a bank account until you are discharged from bankruptcy.
However, there are infact 40 basic bank accounts, half of which will allow an
undischarged bankrupt to open an account. This in itself indicates the writer of
the article is not fully aware of the effect of bankruptcy, therefore giving the
impression that the article could possibly be the result of poor research.
The Enterprise Act 2002 (bought into force in April 2004) was made to give
honest people a fresh start in life, which would be free from the stress of
debt. Not for the purpose of encouraging people to “use insolvency as a way of
shaking off creditors”. The writer implied that the provision, which allows the
IP to request a restriction order on a bankrupt, is hardly used. Perhaps this is
because, people who lodge petitions for bankruptcy have not gone out to get
themselves into huge amounts of debt and are genuinely unable to repay their
debt due to unforeseen circumstances, rather than fraud, recklessness or
dishonesty.
If an Insolvency Practitioner suspects fraudulent or criminal behaviour, they
will apply for a Bankruptcy Restriction Order (BRO) for the court to assess and
decide what action to take.
The writer also states that “New” Government proposals due out in the next few
days will make it easier for creditors to set up plans for repayments, an
“Individual Voluntary Arrangement”. Individual Voluntary Arrangements (IVA’s)
have infact been around since the 1986 Insolvency Act and used by employees and
self employed people.
This only further questions the credibility of the writer and The Mail on Sunday
for publishing such an article.
What the writer also doesn’t realise is, people who have failed IVA’s or not
able to get an IVA add to the percentage of people petitioning for bankruptcy.
The worry that this article will have placed on people is not only unnecessary,
but also misleading. The reduction in the terms of discharge from bankruptcy is
supposed to be a positive change in The Enterprise Act 2002, not a negative one
as implied in this article.
If you have sought advice, and you know you have no other option than to take
the bankruptcy route then you should not be put off. “Nothing has changed”, as
Simon Wiggins informed one of his posters who read the article and was concerned
by it.
If you would like further advice regarding your financial situation FCL Debt
Clinic offer free debt advice which will enable you to see what your options are
regarding resolving your debt problems.
About the Author:
Nicola Bullimore has been working with people regarding debt for some years. For
more information regarding debt issues, please visit Debt Questions. |
