¿Es tan atractivo como antes la inversión en el sector bancario en UK tras la subida de tipos? ¿Qué pasa cuando suben los casos de impago en entidades financieras? ¿que es mejor inflacción o desaceleración económica? ¿nos hemos colao con un 4,75%?... solo para reflexionar... muy buen artículo.
[quote]Why bankruptcies are set to rise even further
“Britons are going bankrupt at the rate of one a minute,” was the Daily Telegraph’s headline on Saturday.
In the second quarter of this year, 26,071 people became insolvent. The total so far this year is now 49,674 and it’s very likely to exceed 100,000 for the year - the most since records began in 1960.
Meanwhile, the number of houses repossessed by mortgage lenders in the first half of this year jumped to 8,140 - nearly double the number of repossessions as occurred at the same time last year.
These are scary statistics. But judging by the mindset of many of the UK’s borrowers, not terribly surprising...
The boom in insolvency has been attributed to a number of things. Commentators have blamed everything from irresponsible lending by banks, to changes in the bankruptcy laws, and the aggressive marketing of Individual Voluntary Arrangements (IVAs).
For those who don’t know, IVAs are a ‘soft’ form of bankruptcy, where an individual comes to an agreement with their creditors to pay off a portion of their debts with the rest written off.
But from many of the case studies circulating out there, we’d suggest the problem is that credit conditions have been so easy for so long that large numbers of people have forgotten that debts need to be paid back at all.
There’s a fascinating series of articles running on the BBC’s website just now, concerning one woman’s struggles with her debt burden.
We take absolutely no pleasure in seeing people suffering from bankruptcy or overstretching themselves, but the attitude towards debt expressed in the series is quite revealing.
The woman in question and her husband have remortgaged their home and her two buy-to-let properties to invest in his restaurant.
Now this is a high-risk decision. Nearly 70% of restaurants go to the wall within two years of opening. So it’s a move that neither of them took lightly, presumably. And unfortunately for them, the restaurant has now run into trouble, and worse still, she has lost her job.
But now that they have - sadly - run into problems, the lady in question is completely taken aback that her lenders are less than thrilled with her proposals that she takes a year-long, interest-free payment holiday until she gets back on her feet.
We’re not saying that it might not be a good idea for her lenders to negotiate with her now. But she seems to be under the impression that it should take no more than a couple of phone calls to allow her to write off her debt burden for the foreseeable future.
Some of the most gob-smackingly naive comments come in relation to her reluctance to sell her buy-to-let properties. It‘s unclear as to how much equity she actually has remaining in these properties - though presumably it is some, as her debt counsellor suggests she sells one of them to raise some money. Agreeing reluctantly, she writes: “I had hoped that the property would be my pension but it looks like I will be back to square one.”
But this is the problem with debt. You can’t just ring-fence your assets and hope that your creditors will happily ignore them. It’s like saying: “I know I owe you a lot of money but I can’t pay you this month because I don’t have the cash. Well, I do have £10,000 in the bank, but I was hoping to save that for a rainy day.”
She’s far from the only one with an unrealistic view of debt. Another cracker on the BBC website is from one reader who took out an IVA after running up £37,000 in debts. He complains about how the IVA was anything but an easy option. “I found the whole experience very distressing. It all seemed to be about squeezing as much money as they could out of me.”
But that’s exactly what it’s about. We wonder how indignant he would be if someone borrowed £37,000 from him and then couldn’t pay it back. Would he try to ’squeeze as much money as he could’ out of them? We suspect so.
We imagine we’ll be seeing a lot more stories like this in the near future. With interest rates rising and banks starting to panic about the number of high-risk clients they’ve carelessly taken on in recent years, all those people who thought that payback day would never come are in for a shock. And that means we can expect even higher bankruptcy statistics in the months and years ahead.
Author: John Stepek[/quote]