20 percent of big UK debtors consider insolvency

And while the banks make provision for bad debts, 20 percent of borrowers who owe more than £10,000 in unsecured personal debt are considering making themselves insolvent.

According to debt consultancy Thomas Charles, the number has surged dramatically since March when only one in seven said they had considered insolvency as an option.

Maybe the findings bear out the fears expressed by HSBC. The problem is not so much that it’s is easier to declare oneself bankrupt – there’s still a lot of stigma associated with bankruptcy, and the softening in rules were designed – quite rightly in our view – to encourage entrepreneurship.

The problem, perhaps lies in the predominance of advertising and other high profile marketing promoting the benefits of Individual Voluntary Arrangements. Arrangements in which payments are based on what the debtor can afford, and which entail writing off the debt after six years. [...]

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