It's Getting Easier To Get Rid of Debts
11 November 2007
The news is out that bankruptcies are at a 14-year high. Bankruptcies for the year to June were up 16 per cent on the year before. However, changes will soon come in meaning that people who owe less than $40,000 and meet certain criteria could be declared bankrupt with the bankruptcy only being recorded for a year.
This is sending the wrong message to people. The individuals who clocked up the debt must take responsibility for it. While some credit providers are handing out credit cards and debt to pretty much anyone, there is no obligation on the person to accept it. If they do decide to go and spend the funds, they must suffer the consequences. This means either paying the money back or going through a normal bankruptcy.
A one year "quick bankruptcy" sends the wrong message. There will be little embaressment attached to the bankruptcy. People who clock up too much debt need to realise what they've done; bankrupting the person and recording it on their credit record for seven years should be a strong signal. Changing the bankruptcy terms will just make the situation worse.