Borrowers to revisit Bankruptcy in 2008
The number of indebted loan and credit card borrowers who choose to control their debt situation through voluntary Bankruptcy, is expected to soar during the first half of 2008.
One of the UK’s leading debt charities has revealed that the number of new Bankruptcy cases, may well exceed the number of new IVA cases in 2008. Record numbers of consumers are now classed as being seriously indebted, beyond the point in which traditional debt tools (such as consolidation loans) are likely to have any meaningful effect. As a result, more and more consumers are expected to choose bankruptcy as a means to escape their debt spiral.
The actual act of declaring Bankruptcy is viewed with a certain degree of distain by the UK population, due to the perceived negative socio economic impact that entering into such a process can have on a person. As a result, large numbers of indebted consumers have pursued the IVA route over voluntary Bankruptcy for the simple reason that is it a lesser-known process, coupled with the fact that entering into such an arrangement is not made public.
However, the IVA has come under heavy fire by both the media and the lending industry, the result of which (it is believed) has caused consumers to revisit the option of Bankruptcy.
One expert suggested that in a sizeable number of cases, the Bankruptcy option is actually the most suitable, but due to the perceived shame of declaring Bankruptcy very few consumers are willing to accept it, often opting for an IVA instead. However, changes in the way in which consumers view the IVA is likely to spur people to reassess Bankruptcy as a possible solution.
