Insolvency News Roundup - UB40 in the clear, Young people in debt, Farepak fees and the Quinn bankruptcy - biggest in the world!!
There have been some interesting insolvency related items in the news of late. The two big stories are of course the Farepak fees issue and the huge Sean Quinn bankruptcy (a record breaker!! - no longer is Kevin Maxwell our "bigest bankrupt"). The Farepak cases highlights the ongoing IP fee perception issue. As the BBC note: "The business collapsed in 2006, and its customers - who were saving up to spread the cost of Christmas - are now set to receive £5.53m in compensation.But administrator BDO said the cost to-date of winding up the company stands at £8.2m."
Banks should be more sympathetic to bankrupts according to the Independent. This is a really important point if we are to have a true rehabilitation through bankruptcy. Discharged bankrupts need bank accounts to re-start their fiscal lives. The recent INSS consultation on this very point is to be welcomed.
Meanwhile UB40, unlike their namesakes, have avoided financial issues it seems. Another pop star has had similar good fortune it seems. Elsewhere, R3 have observed that: Young people still getting into more Christmas debt than the older generation. They go on to say, "Nearly one in 10 (9%) people said they have already borrowed money to pay for Christmas, according to a recent survey by insolvency trade body, R3. 16-24 year olds were more likely to have borrowed money than any other group, with around one fifth (18%) already in Christmas debt, compared to 4% of over 65s. These figures are down slightly from 21% of young people and 6% of over 65s having borrowed money in the lead up to Christmas last year.
Frances Coulson, R3 President, comments:
“It’s worrying to see that the 16-24s are developing bad money management skills so early on. Fewer people than last year, across the board, have borrowed money but there are still some weeks until Christmas. With unemployment figures up, we can only expect to see more people saying they are struggling to afford the demands of the festive season.”
The survey also found that 13% of respondents said they did not think they would have enough money after Christmas to afford bills at the end of December. However, in London the figure was above the national average with 16% saying they would not be able to afford December’s bills.
A third of all respondents said it would take them one month or more to pay back Christmas debts. This is an improvement on last year, when just under half said it would take them one month or more.
Frances Coulson continued:
“The recent pick up in retail sales figures indicates that people have started their Christmas shopping early this year, and this is a wise choice. Given the ever increasing cost of living, particularly the hike in energy prices, spreading the cost of Christmas across a few pay cheques is sensible. However, there are still huge numbers of people who will struggle to afford Christmas and may well look to short-term loans and credit cards. They should be wary of the high interest rates that often accompany these products, as this will leave them lumbered with Christmas debt long into next year. I would advise anyone struggling with their finances around the Christmas period to seek the advice of a professional as soon as they can.”
Dickens once said in relation to credit: "Credit is a system whereby a person who can't pay gets another person who can't pay to guarantee that he can pay." Some things never change!!
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...