The following item was first posted on the Motley Fool web site, has been picked up by Sky News, and is now seen in a couple of papers. IS this not advertising Bankruptcy as the easy way out, with the 'disacharged after a year' claim?
It makes it sound like if you have massive debts and no assets, an easy way to get out of it is to follow this advice. And if your, say, a student, why not just take the year off and go around the world.
Im getting a little sick and tired on the stupids getting such an easy time of it...
Is Bankruptcy So Grim?
Report by Jane Mack
The number of people going bankrupt has risen by nearly 30% over the last year taking figures to a record high of more than 40,000 personal bankruptcies a year.
This doesn't surprise me - there's been a remarkable increase in the number of people choosing bankruptcy on our Dealing with Debt discussion board over the last year too. And, for the most part, they've not found it nearly as hard as they'd thought it would be. In fact, some of the judges and official receivers they've faced have been surprisingly kind.
Bankruptcy is obviously a last resort and there is still an element of stigma attached to it which makes people want to avoid it at all costs not least because those with assets - namely their home - stand to lose them.
The financial services industry also puts a big black mark against your name which stays there for several years to come and it will affect your ability to get a mortgage and credit. You'll also pay higher interest rates because you'll be seen as a higher risk and it can have an adverse affect on your job prospects too.
But, for someone with large debts, little or no income and no assets, bankruptcy can be quite a good option. Indeed it may be the only way out and, since the rules were changed a couple of years ago, bankrupts are usually discharged within a year so you get your life back more quickly these days.
Of course there are mutterings about how the new regime is being abused by people who want a quick get-out but for the most part people going into bankruptcy have simply been the victims of unfortunate financial circumstances. And, judging from the people on our Dealing with Debt board, the huge relief of having the miserable debt burden lifted far outweighs any of the restrictions that come with going bankrupt.
Nevertheless, the best solution is still not to get into debt in the first place or, if you're already in debt, to try your best to get out of debt before it all goes badly wrong. Bankruptcy may be easier than it used to be but it's still a very scary prospect.