Capital Link has claimed that too many homeowners are being told that bankruptcy is an easy way out of debt.
The company have seen a large increase in the number of negotiations undertaken on behalf of bankrupt customers, trying to stay in their homes. They believe that changes to legislation to reduce the stigma of bankruptcy were well overdue, but now have given rise to the illusion that debt will magically disappear, which in the case of homeowners is not the case. They will probably have to sell their home, if they cannot raise the money to cover the debt in any other way.
Our view
Changing the law so that you can be clear of your debts in a year was a major error that is now abused by people looking to easily wriggle out of debts. People considering bankruptcy as an easy option should be reminded that they are required to disclose the fact for life and it may impact on future ability to obtain credit. Failure to disclose your past bankruptcy is also a criminal offence.