The level of personal debt in this country will become a huge political issue over the next few years. In the end, individuals have to take responsibility for their own actions. Everyone knows what their income is and what level of debt they can service and they should act accordingly. But the Government has made it so easy to go bankrupt it has taken away bankruptcy’s social stigma. Amazingly, thanks to Labour’s 2003 Insolvency Act you can now emerge from bankruptcy after a mere nine months. Unsurprisingly, the number of annual bankruptcies has now exceeded 100,000 for the first time ever. Just think what the number will rocket to when there’s a recession.
Bankruptcy should never be seen as'the easy way out'. There are even stories of students of are encouraged to go bankrupt as the best way of avoiding paying back loans - they then go travelling the world for a year and by the time they return they are out of bankruptcy.
Bankruptcy leaves a trail of destruction among the debtors. I know few people will have any sympathy for credit card companies or banks who are left being owed thousands, but there are many small companies and individuals who are affected. Bankruptcy should always be a last resort, not a first.