It used to be the case that if you had ever declared yourself bankrupt that was it - the end of the road for you ever owning anything and ever running your own business again.
Not any more, in fact more and more people are taking this option when things get tough and are simply starting over again no questions asked. This has led to many people querying whether this is morally right and whether or not it is far too easy to use this option?
For instance, it may lead to unscrupulous business practice; people running businesses into the ground and simply being able to start up again whenever they feel like it. The threat of bankruptcy and what the stigma used to entail used to keep everyone in check. It used to be the case that if you were ever declared bankrupt then this used to mean that you either had really bad luck or that you weren't in a position to be able to be trusted with money - either or scenario wasn't great to be associated with. How times have changed.
In 2004 the way that this country dealt with bankruptcy changed. In effect it became easier to declare yourself cashless and the timescale in which you were bankrupt for, also changed. The first thing that altered was that the time that a person had to remain bankrupt for changed from three years to one year. The idea behind this was that should a business have suffered some financial misfortune, they would only be out of the game for a year and then they would be able to get back in the game and hopefully make a successful go of things. A lot of people think this may be a get out clause being handed on a plate however.
If you think about it, any person could set up a business and then shut it down when the going gets tough. We believe it opens up avenues of illegitimate behaviour too. According to numerous surveys done on the types of people filing for bankruptcy however, the majority of these people filed for bankruptcy as a last resort with many regretting the position that they were in and taking many years, if any, to start afresh.
A couple of other things with regards bankruptcy proceedings have occurred since 2004 that have again made it even easier to file for bankruptcy. The biggest change that concerns us and others is the ability to apply online for insolvency. Gone are the days when a person had to go to court, go before a judge and deal with numerous amounts of paperwork. Now all that is required is that you log on and apply for bankruptcy. There also used to be a fee that you had to pay to be declared bankrupt, this fee is still payable but you can do it in stages. This means that it is even easier to get out of a sticky financial situation.
We have always been for making things easier and cutting a lot of unnecessary red tape, especially in the finance sector as we believe it is bound by a lot of pointless restrictions; however, even we are a little suspicious as to how lenient the bankruptcy guidelines are.
Time will be the biggest indicator into letting us know the kind of people that are filing for bankruptcy and whether or not they have legitimate reasons and or whether they were sensible or being reckless with their finances in the knowledge that there is always an easy way out should things go pear shaped.