Monday 14th of September 2009
Bankruptcy is seen as the last resort for many, but the recession has pushed more people into taking this route, a claim suggests.
In the second quarter of 2009, there were almost 19,000 bankruptcies declared in the UK, a 15 per cent rise compared to the same period last year, moneysupermarket.com notes.
Furthermore, 3.4 million UK adults have "severe" debt problems. However, bankruptcy is usually advised to Britons who have more than £50,000 in unsecured debt.
Rather than take the "drastic" option of bankruptcy, the website says that an individual voluntary arrangement (IVA) could be a better route.
During the 12 months after bankruptcy, people will not be able to get a chequebook, or a standard current account which offers an overdraft facility.
"Not having a bank account can make life difficult, especially if your salary is paid electronically, or you want to pay household bills by direct debit," moneysupermarket.com asserts.
Only Barclays and the Co-operative Bank offer basic bank accounts to undischarged bankrupts.
By Ashley Littley
- Alternatives to bankruptcy available, expert notes
- Bankruptcy 'should be a last resort' to tackle debt management issues
- Bankruptcy 'has improved attitude towards debt'
- Insolvency levels rising, figures show
- Negative equity leading to bankruptcy increase, says expert
- Insolvencies up 27.4% in second quarter
