Bankruptcy No Easy Way Out of Debt
Personal_Finance /
Debt & Loans
Jun 04, 2007 - 12:05 AM GMT
By: Submissions
According to the latest report, 2007 was witness to a steep rise in the number of people having CCJs registered against them. Conservative estimate put the number at a rough 850,000. It seems that quite a lot of consumers see bankruptcy as the only way out.
2006 was a bumper year as far as bankruptcy numbers are concerned. More than a 100,000 people had declared themselves insolvent. Official figures show that 15,356 people bankrupted themselves and 11,299 agreed an IVA in Q1 2007. Many instant online credit information providers like Equifax is concerned that many consumers do not understand the implications of going bankrupt.
There is a common misconception that bankruptcy is an easy way out of debt with no after effects.
Voicing his concerns, Mr. Neil Munroe, External Affairs Director, Equifax stated that - The 2002 Enterprise Act meant a bankrupt's debts can be written-off after one year instead of three - This has led to a number of people struggling with debts seeing this as an attractive option to wipe the slate clean.
But what they don't realise is the fact that while the bankruptcy will be cleared after a year, the record of bankruptcy remains on their credit profile for a minimum of six years. And this could have quite a serious impact on their future.
As lenders use applicants credit file when assessing their case for credit or loans, bankruptcy could result in them either being declined or paying a premium. And that�s not all; it can also affect their ability to get a job or for that matter even a mobile phone because a credit agreement will be taken out for the line rental.
By Amanda
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Comments
Angelo
18 Jun 07, 00:57
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