Although not in this position myself, I have been extremely close to bankruptcy before. The reason I am posting this here, is to highlight a situation a friend of mine is having at the moment.
She lost her job in January 2009 and as a highlight of this, she has still not managed to find any work. Having a mortgage on her house, she decided that she would sell the property as she could no longer afford to keep it. The problem is, due to the poor state of the country and the housing market, she has been unable to sell it.
The insurance she had to cover her in the event of job loss, has stopped and she has had to sell most of her possessions to try and pay the mortgage. Her only income is Job Seekers Allowance, as housing benefit is not paid for those who have a mortgage.
She is now living in what can only be described as a shell of a house, with no furniture, no possessions and no car, as she could not afford to keep it.
The only option available to her now is bankruptcy, but she is in such a poor state, that she can not afford to go bankrupt. She is being hounded by debt collectors and threatening letters coming through her door and her health is suffering because of it. The person she was, is long gone and all the life she had in her has been extinguished and it is certainly not through a lack of trying to get another job! She is the same as me when it comes to searching for work. Spending all her spare time applying for work, but getting no response back.
The thing is, a lot of the stress and worries she currently has, is through the debts she can not afford and the hounding she is receiving.
She has made enquiries about bankruptcy, but the fees which are charged for this are extortionate for someone who already has financial difficulties. The money she receives from her J.S.A, is barely enough to keep her going as it is and she just can not afford to put that money away to save up to go bankrupt.
Why does this idea matter?
This whole ridiculous idea of charging people who have severe financial difficulties is wrong!
It is completely immoral to put people who are in this situation where they can see a solution to the problem, but keep it beyond their reach!
The government introduced Debt Relief Orders, which are a complete waste of time for most people, due to anyone who has a pension waiting for them when they retire not qualifying (ie…money they can not access until retirement age!) If you have a pension, you do not qualify for a D.R.O its as simple as that!
The longer it takes for something to be done to sort out this disgusting and quite frankly disturbing mess, the worse it is going to get.
Keeping people living in fear of debt collectors and being threatened with court action every day is no way for a civilized country to run and for some people, being in such a poor position could force them into crime just to try and live!
This government's main thing so far is to "cut the debt!" Its one of the main reasons for this website…to cut debts by removing things they no longer wish to maintain!
Well consider this, cutting the debt of the country may be needed, that I do not argue with, but making all these cuts and announcements of impending changes to benefits etc. all of which will have an effect on peoples lives, is like rubbing salt into an open wound if you are in such a poor situation with no way out!
Change the rules surrounding bankruptcy and debt relief orders and allow people the liberty of being able to get them selves out of the severe difficulties they are in!
Its not as if going bankrupt is something to be taken lightly in the first place! The consequences are quite severe after bankruptcy is declared and has an effect for many years afterwards!