Posts Tagged ‘epidemic’

When to Go Bankrupt

November 15, 2008

Since contemplating bankruptcy for myself I have generally advised against it. At the same time every person’s situation is different.

So noting the new figures for bankruptcy and the chilling of the financial ‘institutions’ to their customers I revisit the matter.

According to This is Money personal bankruptcies rose seven per cent in the third quarter, against a year before.

The number of families whose lives were turned upside down in the three months July, August and September is 13,653. Bearing in mind that bankruptcy lasts a minimum of a year, and that maybe it takes another five to recover, that suggests the number of families affected now are around 200,000 – and rising.

That will soon be one household in ten; an epidemic!

Apparently financial institutions are forcing these bankruptcies, just at a time when their own debt is being ‘socialised’ and they are walking away from their mistakes with their yachts intact.

However let me steer myself away from the politics of this…

While there may be cases where the banks will recover more in this way, than from an intelligent approach, my own experience tells me some of the banks are incapable of understanding the difference between different situations.

On the whole they will have less to gain from forcing bankruptcy, than from an intelligent agreement.

I always say it is better to talk to the creditor, persistently, than to just assume there is only one way to go… downhill!

When you do talk, or write, remember that one operative may have a quite different way of dealing with customers than the one sitting next to her.

You may have to contact a different department; or the Chief Executive Officer of the creditor. Don’t be afraid to. He uses the smallest room just like you do.

If you are in a position where you obviously cannot pay what is the point of wasting company resources chasing you? It is poor decision making on the part of the creditor.

And if you have assets what is the point of forcing a sale of them at a time when the cash gained will be minimal.

And if you are in a position to offer something, what is the point in saying ‘no’ if the offer presented to the creditor is reasonable in your personal circumstances.

It is surely all good accounting, and straight common sense.

Although knowing what I do about derivatives, toxic debt, dark pools and the other arcane forms of gambling in the financial casino I don’t think anyone can accuse the financial ‘institutions’ of being blessed with common sense.

Joseph Harris

Debt Control Man