Bankruptcy is a process supposedly to allow people a new start, a way out of something they may not see any way forward from. In this current climate, don’t always assume it’s from someone poorly managing their own money – there can be many outside factors beyond that person’s control. From what I’ve seen, although there are those who will spend £50grand, then declare bankruptcy, then try start spending again, there are also many who will try anything to avoid it e.g voluntary credit arrangements.

The rules can seem strange penalties now seem lighter, but from what friends tell me, they aren’t really light. From not being able to get either a credit card or ‘credit’ i.e. only able to use cash for between 5-10yrs, to one person never being able to buy a house again, despite their earnings – this can mean they can only use cash to buy their next car, or white goods. If you lose your house, you may find it difficult to move into rented housing as you can’t get a good reference, or have to pay 6 months in advance, so accomodation becomes a slum. It appears it’s not just a blot on your record, but creates serious limits / problems is therefore something which a ‘decent’ person will think hard about before doing. (There are always those that will abuse the system.)

This ‘tool’ has been around for a long time, it’s not just to stimulate economy.