History of bankruptcy

The earliest recorded form of bankruptcy is to be found in the Old Testament. Moses tells the Israelites that creditors are to cancel debts at the end of every seven years. Check it out for yourself, it is found in Deuteronomy 15:1-3. The origin of the word bankrupt is believed to be from the Latin bancus, a tradesman’s counter or bench, and raptus, meaning ‘broken’. Essentially if a business could not pay their creditors then the bench where they were trading from was literally broken. In England the first bankruptcy law was introduced in 1542. At that time being in debt was a criminal offence and the debtor faced a prison sentence or having some of their belongings taken away from them. In 1570 the next bankruptcy law was passed which allowed only creditors to start a case against a debtor. Only merchants could be made bankrupt and not the pubic in general. Over the next few centuries further changes to the law were made where more of the debtor’s assets were taken and harsher penalties were introduced for not complying with the commissioner of the bankruptcy. Things remained the same until relatively recently. In 1986 a new insolvency law was passed and aspects of the process were changed considerably. No longer would bailiffs come on the date of the bankruptcy order to take all possessions. Section 283(2) of this new law provided details of ‘exempt property’ that were to be excluded from the bankruptcy estate and included such tools, books, vehicles and other items of equipment as are necessary for the bankrupt to continue their employment, business or vocation and such clothing, bedding, furniture, household equipment and provisions as they need to satisfy the basic domestic needs of themselves and their family. Further to this the Enterprise Act (2002) came into force in April 2004. Along with many processes that makes the whole procedure more lenient and practical for people in general, it allowed for a reduction to the number of restrictions that are automatically imposed on undischarged bankrupts and provided for the automatic discharge of nearly all bankrupts after a maximum of 12 months instead of 3 years. (In fact most people are currently being discharged between 6 and 9 months). There was also an introduction of Bankruptcy Restrictions Orders (BROs) to protect the public and commercial community from bankrupts who fail to comply with the instructions of the Official Receiver. It introduced Income Payments Agreements (IPA) as an administrative alternative to court-based Income Payments Orders (IPO). IPAs will carry the same conditions as IPOs and both will be able to run for a period of up to three years. So as you can see bankruptcy has moved on a great deal from being a criminal offence hundreds of years ago to what it is now – an effective, powerful and legitimate debt solution in modern times.

I don’t know what to do to clear my debts?

For most people, getting into debt is a worry. Some worry if they owe even a small amount of money, while others don’t start worrying until debts mount up and become too big to manage. However, all personal debt needs to be managed and reduced.
The first thing to know is how much you really owe. Perhaps you have a figure in your head: how accurate is this? Without going through it in detail, it’s impossible to know precisely how big your debts are. Worry can also inflate the problem, so if the actual figure is less than you thought, you’ll have less to worry about.
The other thing is to examine loan and credit agreements to check whether they are enforceable. Sometimes terms and conditions of agreements are so poorly drawn up that a lender will be unable to pursue their loss through the courts. Also, creditors can also lose paperwork so that when you request a copy of a loan agreement or similar, they are unable to produce it and cannot enforce your contractual obligations.
Just getting the facts straight can help to improve your situation by establishing who your creditors are and whether they can enforce their claims to what you owe them. If it turns out that some claims are unenforceable, you have already started to manage your debt problems, while otherwise you will have put yourself in full possession of all the facts you need to tackle the challenges ahead.
This first stage is vital if you are to take control of your debt problems. If you are frightened to discover the true level of your debts, put this fear aside, as until you know the full amount, you cannot reduce it. If this revelation shocks you, you will have finally got this over and done with and can start looking to the future.
So don’t put it off, start now.

I’m in debt, yet debt specialists want even more of my money

I’m in debt, yet debt specialists want even more of my money

It’s ironic that when you’ve got money problems, those offering to help you want to charge you money you haven’t got for helping you. On the other hand, if this is what they do for a living, then it’s only fair that they earn a reasonable wage. So how do you find the right balance of paying for a debt solution that is not only right for you but also pays the provider a fee that is fair on both sides?
When you’re under the pressure of mounting debt and someone dangles a tempting solution in front of you, it can be easy to take the bait and sign up fast. The problem is that decisions made fast can affect you for some time ahead. For example, bankruptcy may take up to a year to obtain your discharge from your debts, while Individual Voluntary Arrangements (IVAs) can require you to make payments for up to five years.
If you’re committing yourself to agreements that could constrain the way you live your life for years, it’s worth taking some time to consider all angles, ask all the right questions and make sure you get the right answers.
According to the UK Government’s Insolvency Service web site, “insolvency practitioners are usually accountants, some are solicitors and their fees are similar to those charged by members of these professions for other kinds of work.” If you’ve ever used a solicitor or accountant, you will be familiar with the range of fees they charge.
The best solution will always be to clear your debts yourself, either by coming to an arrangement with creditors or by overhauling your expenditure to reduce your debts without paying extra for a specialist debt solution. If this is not possible, you can arrange your own bankruptcy, although this will still require certain fees to be paid by the court. If you decide that you need specialist help, this will probably include a fee for the provider.
Fees vary from one debt specialist to another, so it is important to know up front all charges you are liable to pay. A bankruptcy adviser is likely to charge for advice and administration in addition to statutory costs which must be paid direct to the court. An IVA provider is likely to include its fee in the monthly payment you agree to make for a term of up to five years. (Remember, just because the IVA fee is not paid up front, it can still amount to thousands of pounds.)
When you see the fee charged by a provider, you can decide whether it is a high price for a cumbersome debt solution or represents good value for money and helps you in your situation.

Finding an effective solution to personal debt

Debt is a serious problem. It doesn’t matter who we are – business owner, company director, employee, unemployed or pensioner – debt can bring enormous disruption and make us feel as though it’s ruined life for us. It’s only natural to feel this way, and many people do, but it’s important to see that we can pick ourselves up, re-build life and enjoy it once more.
This blog is about debt, how to deal with it, how to get through it and how to make it a distant memory.
There are many aspects to debt – creditors chasing after their money, the worry of losing home and possessions, the strain of close family and friends, loss of self-confidence, feelings of failure and guilt – and their impact on any individual should not be under-estimated: it’s tough being in debt.
Knowing what to do is a problem in itself. There are many experts available, from banks to lenders, from accountants to solicitors, from specialist debt companies to insolvency practitioners, all trying to sell their advice, services and solutions. But it’s like looking for a tradesperson from the telephone directory: how do you know which one can you trust?
At this point, you’re probably asking why we’re publishing this blog. The answer is that our business is helping people manage their debts, even if they don’t use our services.
We won’t tell you which solution to choose or which provider to use: only you can decide that. However, we will look at what questions you can ask so that you can make these decisions for yourself with the facts at your fingertips.
As well as looking at how you can deal with your present situation and manage your debts, we’ll look at the other side of debt: the future.
Many people think that once they’ve lost their good credit rating, they can never recover it. This is not true: you can start re-building your credit profile almost immediately. It’s important to start taking positive action to re-build your credit profile, your self-confidence and your life.
Dealing with debt successfully is not always easy, but it can be done. If that’s what you want to do, subscribe to this blog.
www.bankruptcy.co.uk

House Prices Not Expect Rise Until 2012

The UK’s house price are not expected to rise but will keep falling according to a leading independent forecaster. The NIESR expects this due to the availability of mortgages, which has shrunk by 65% and is unlikely to pick up soon. Speculation of house price stabilization and recovery is not the case according to the NIESR’s economist Mr Kirby, said. “ We only see growth returning in 2012”. The Halifax and Nationwide showed that the decline in prices is easing but is considered that this due to supply and demand, and is only a temporary result.

Almost 9p of each £1 needed to pay budget deficit

Within four years almost 9p in the £1 of tax collected by British individuals and companies will be spent on servicing the Governments debt, opposed to being spent on services such as hospitals, education, defence or the welfare state, according to new calculations. The current costs are around 5p for every tax pound collected. The National Institute of Economic and Social Research (NIESR) is saying the debt will rise from £25.6bn this year to £50.7bn in 2013/14, due to higher interest rates and a greater debt burden. The cost in front of taxpayers as debt rises at the fastest rate in peacetime history. The families will have to suffer a shocking combination of public sector cuts and increase of taxes over the coming years, as the Governments black hole of debt is growing rapidly. NIESR is saying that Government borrowing will still be above the £120bn mark in 2014 and could even be as much as £160bn if Budget assumptions were upheld. The Treasury borrowed some £13bn in June which is the biggest amount ever for that month of the year according to the Office of National Statistics. How many years will the Country be in this turbulent black hole?