Less stigma about bankruptcy
25/10/2010The embarrassment of admitting financial defeat and entering bankruptcy as a debt solution has dramatically reduced, according to professional service firm RSM Tenon.
National head of bankruptcy at the firm, Mark Sands, thinks the stigma of bankruptcy has massively reduced from anything he witnessed upon starting his career in the sector 25 years ago.
He said: "First of all the people became comfortable with taking on debt twenty years ago, and now people are starting to become comfortable with reneging on debt and it has perhaps become much easier."
He added that the government reducing the effects of bankruptcy from three years to one year, in 2004, has also played a part.
Kevin Still, Director of Atlantic Financial Management says: "Our experience is that the majority of clients that we speak to or meet would prefer not to petition for their own bankruptcy and try and repay their debts. However, the reality is that for many there is no real alternative to bankruptcy or even a Debt Relief Order (DRO) as they often have no assets and very low disposable income with no realistic hope of making more than token payments to their creditors. Even clients that are already on a Debt Management Plan (DMP) can be prone to further changes in circumstances where bankruptcy may need to be re-considered."
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