Bankruptcy has always carried a certain stigma to it. This is something that is gradually changing in the 21st century as we progress through the so called “credit crunch”.
In the early 1900’s Bankruptcy was considered a terrible thing but this is now changing and is called de-stigmatization.
In many cases it is the best option for people and if you are in a situation where you have £80,000 of debts what other option does the normal person have?
The constant flux in relation to property prices led to thousands of people declaring themselves bankrupt in the late 90’s and the majority of these people were always very careful with money and their income. Unfortunately in some cases it was just unavoidable.
We are now seeing a similar situation, due mainly to irresponsible lending that has occurred over the past five to ten years. I think we all agree that the person that has spent the money must bear some responsibility but let’s look at a situation that has occurred quite regularly over the past few years.
Many people that had credit cards and loans began to hit a point where they were maxed out and struggled to maintain payments. In some of these cases the credit card companies just increased card limits-in many cases without somebody requesting the increase.
In other situations people turned to their banks and informed them that they were struggling with payments. What was the response? In many cases the banks would suggest loaning the person more money, decreasing the monthly loan repayment by spreading the loan over a longer term and tempting people into this new situation by offering some extra cash into the bargain.
Luckily enough this irresponsible behavior has now stopped but many people see this as too little too late.
Due to these and other issues such as house prices falling Bankruptcy has been at the highest point in our history. As more and more people take this option the stigma of bankruptcy has started to become less of an issue as it is spoken about and heard of to a much higher degree.
At Bankruptcy-Explained we welcome the de-stigmatization process. In fact if Bankruptcy was called Restart how many more people would take this option?