Insolvency, Bankruptcy and the IVA: the Truth Behind the Worst Ever Levels of Personal Debt
(ContentDesk) November 5, 2005 -- The number of personal bankruptcies has gone up by 32 percent and IVAs by 98 percent, the DTI announced on Friday. In the third quarter of 2005, 12,256 people went bankrupt and 5,754 entered into an IVA (Individual Voluntary Arrangement). And the DTI doesn't know why this is happening. But The Debt Counsellors do..."The Department of Trade and Industry might not know why bankruptcy and IVA levels are so high but those working in the debt help industry do," says John Porter, a senior counsellor at The Debt Counsellors (see http://www.debtcounsellors.co.uk).The DTI wants to explain why so many people can't pay their debts. They have commissioned surveys, made models of business start-up rates, spoken to Bankers about their lending policies and written reports with lots of colourful graphs.
Who knows how much all this cost but all they can say is that "no single factor can conclusively be proven to be driving this trend."We could have saved them a lot of money. All they had to do was ask the professionals working in the front line of bankruptcy, IVAs and the debt help world. The numbers in bankruptcy and in an IVA have got out of control for three main reasons, each compounding the other. The first two causes are:- Easy credit from mortgages, loans, credit cards and store cards- More relaxed attitudes to debt and bankruptcyWith this background the law was changed and The Enterprise Act 2002 made it possible to be discharged from bankruptcy after less than a year. The impression given, although not intended, is that bankruptcy is now an easier option.
This doesn't only affect the bankruptcy process but, via the media, it affects the mindset of those all along the already slippery road that starts with easy credit and not enough worry about the consequences of letting debt get out of control. As this is written, a bankrupt is talking on BBC News At One, saying "bankruptcy is not that bad."The Enterprise Act was a bit like spilling oil onto that busy road of already out-of-control cars and the results were inevitable - more bankruptcy and more IVAs.About these increases in bankruptcy and IVA numbers, Porter from The Debt Counsellors says, "I'm not surprised by the increases. We all knew this was coming. People are starting to think that bankruptcy is an easy option, but it's not. Of course, many of them are sensibly given the option of an IVA but much better would be to not get insolvent in the first place.".
Online Retirement Planning Consultancy Urges Taxpayers to Demand that United Airlines Fulfill its Pension Obligations
Following United Airlines' petition to have the U.S. government take over its pension obligations, Retirement-4-U, a retirement planning consultancy, is calling upon American taxpayers to voice their opposition to this move. "We at Retirement-4-U urge the American public to write to the U.S. Bankruptcy Court and their legislators, strongly expressing their opposition to United's bailout," says Stephen B. Carkeek, Founder of Retirement-4-U (http://www.retirement-4-u.com).
"The American taxpayer should not have to foot the bill for United's incompetence and mismanagement." United Airlines has petitioned the U.S. Bankruptcy Court to stop making its pension payments as of June 30, 2005, and wants the U.S. government to fulfill those pension obligations. Already the Pension Benefit Guaranty Corporation (PGBC) has announced its settlement with United to become trustee of the company's four pension plans. This is awaiting approval...
Online Retirement Planning Consultancy Urges Taxpayers to Demand that United Airlines Fulfill its Pension Obligations
Bankruptcy > Online Retirement Planning Consultancy Urges Taxpayers to Demand that United Airlines Fulfill its Pension Obligations
Debt Facts
In 2003, almost one and a third percent of US househoulds (about 1,650,000) filed for bankruptcy, indicating that bankruptcy may not have quite the stigma attached to it as in other parts of the world.Somehow, the USA, with a population of about 294 million, managed to have over a billion credit cards in issue. That's over 4 cards for every man women and child. About 20,000 different cards are on offer from suppliers.Those credit cards, together with debit cards, account for a quarter of ALL personal expenditure in the US.Debt is a fairly recent phenomenon. Before the 1930's, most people couldn't borrow, even to finance property, and either rented homes or built them from scratch. Nowadays, mortgage debt runs in the trillions.
Personal debt excluding mortgages is about $19k per household on average, over half of which is on credit cards, a figure that is triple the statistic of 1990.Nowadays, over 40% or US families routinely spend more each year than they earn. The difference?...
Debt Facts
Bankruptcy > Debt Facts