International
Bankruptcy is spiking among UK borrowers – but there are debt relief options if you are struggling financially
The cost of living crisis is affecting UK households, but there are options to consider if you’re having problems repaying debt such as mortgages and…

UK households have one of the highest debt levels in the world. Steadily increasing in the last two decades, the average total debt per household (including mortgages) is £65,619 as of August 2023. This is £34,644 per adult, or around 103.5% of average earnings.
As indebtedness has steadily increased over the last two decades, household bankruptcies have quadrupled, reaching around 200,000 filings in 2022. One of the main reasons of this increase is arguably the 2002 UK bankruptcy reform, which made it easier for people to file for bankruptcy.
Consumer bankruptcies are rising in the UK
While the use of some types of debt relief agreements have fallen in the year to August 2023, according to the latest government figures, registrations for the government’s “breathing space” scheme – which gives debtors 60 days relief from pursuit by creditors – grew by 19% over this time.
The cost of living crisis is probably one of the main reasons for this spike in bankruptcy figures. Families across the country have been struggling to keep up with the rising price of essential goods and increased borrowing rates since mid-2021. At the end of last year, UK pay adjusted for inflation also fell at the fastest rate in 20 years.
Other factors can also trigger bankruptcy, however. Our recent study highlights two main reasons. First, we found that people tend to go bankrupt strategically – if they can financially benefit from it. This often happens when a person’s debt is far greater than the assets they have to liquidate (or sell) as part of the bankruptcy.
Second, adverse life events such as divorce, serious health problems or sudden unemployment can cause financial distress. This often takes the form of loss of income and further borrowing. This affects people’s ability to repay their debt, eventually leading to bankruptcy.
The options when struggling with debt
Filing for bankruptcy is a formal process for cancelling your debts (also known as discharging, or sequestration in Scotland) if you are having trouble making repayments. Consumer organisations such as Citizens Advice in the UK can provide information to help you decide if bankruptcy is the right choice for you.
If you do decide to declare bankruptcy, a court issues a bankruptcy order after an application by you or one of the people you owe money to (your creditors, for example a bank or a supplier if you are a business). Full discharge from debt usually happens 12 months after a bankruptcy order is granted.
But bankruptcy isn’t the only option if you’re struggling financially. A debt relief order (DRO) is a simpler, faster process for people with low income, fewer assets and debts of less than £30,000. When a DRO ends, typically after 12 months, most of your debts will be written off but some types aren’t covered. So, it’s important to check what types are included under this arrangement.
Alternatively, you could enter into an individual voluntary arrangement (IVA), which is a contract with your creditors. There is no maximum limit to the amount of debt that can be included in an IVA but at least 75% of your creditors have to agree to the plan. An administration order (AO) is a simpler version of this for people with debts of less than £5,000. In Scotland, a protected trust deed (PTD) provides the same kind of agreement.
Under IVAs, AOs and PTDs, you agree to repay your debt based on a new repayment plan negotiated by an independent professional called an insolvency practitioner. The plan is approved by the court and your creditors have to stick to it too. The renegotiated repayments are usually made in the form of a single monthly payment or a one-off lump sum.
And during your repayment plan you cannot take out new credit without a written permission from your insolvency practitioner. Bankruptcy proceedings are shown in your credit report for 6 years and new lenders will be able to see that.
A debt management plan is a fourth option for people struggling financially. It is an agreement with creditors to stick to a new repayment plan, negotiated by a licensed debt management company. Unlike the other options, debt management plans are not legally binding, so any or all of your creditors don’t have to agree on a plan and they can chase you for repayments individually. This is known as debt arrangement scheme (DAS) in Scotland.

Getting some breathing space
The UK government launched its breathing space scheme in May 2021. And it has clearly been useful for struggling individuals in the midst of the cost of living crisis – registrations increased by 28% in the year to July 2023.
It allows you to seek legal protection from pursuit by your creditors for 60 days. During this period, most interest and penalty charges are frozen, enforcement action is halted and your creditors cannot contact you about your debts. But you still need to make your repayments.
A version of the scheme is also offered to individuals who are getting mental health crisis treatment. The protection from creditors is for the length of treatment plus 30 days.
Breathing space is a temporary protection and could be a helpful first step to give you some time to plan your finances, but what about after that? Our research shows bankrupt individuals face difficulties borrowing again after bankruptcy.
If you completely discharge your debt, the impact on your borrowing ability is dramatic and swift but short lived – a year on average. But for debt restructuring, future borrowing limitations can last as long as three years.
That’s why it’s important to carefully consider your options if you can’t manage your debt commitments to make sure you find the best fit for your financial situation.
The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.
unemployment bankruptcy bankruptcies treatment unemployment ukInternational
As yen weakens and interest peaks, Bank of Japan balances on a policy precipice
Quick Take The Bank of Japan (BOJ) stands at a critical juncture, striving to maintain a delicate balance amid a changing economic landscape. Recent data…

Quick Take
The Bank of Japan (BOJ) stands at a critical juncture, striving to maintain a delicate balance amid a changing economic landscape. Recent data shows that the 10-year yield, which the BOJ has endeavored to keep below 1%, has touched 0.8, a peak unseen since 2013. Simultaneously, the BOJ has labored not to let the Yen weaken, yet it continues to be pressured as it drops further against the US dollar, crossing the 150 mark for the first time in over a year.
There is burgeoning speculation about possible BOJ interventions in these market movements. As the central bank continues to uphold negative interest rates, a shift towards positive rates might become inevitable in the foreseeable future. It’s a precarious fulcrum of financial strategies that the BOJ is balancing on, with market tempests stirring on one side and the stability of the national currency on the other.
This scenario highlights the intricate dynamics of monetary policies and the profound impact they can have on both national and global economies. A closer look at the situation illuminates the complexities in the BOJ’s policy decisions and the broader implications on the financial landscape.
The post As yen weakens and interest peaks, Bank of Japan balances on a policy precipice appeared first on CryptoSlate.
us dollar interest rates japanInternational
Poland, Austria, & Czechia Introduce Temporary Border-Checks With Slovakia To Curb Illegal Migration
Poland, Austria, & Czechia Introduce Temporary Border-Checks With Slovakia To Curb Illegal Migration
Authored by Thomas Brooke via Remix…

Authored by Thomas Brooke via Remix News,
Poland, Austria and Czechia will all introduce random checks at the countries’ borders with Slovakia from midnight on Wednesday following an influx of illegal immigration.
Temporary checks will be conducted along the length of the border for an initial 10-day period until Oct. 13.
They will focus specifically on road and railway border crossings, although, pedestrians and cyclists may also be asked for documentation. Anyone within the vicinity of the border may be requested to identify themselves.
“The numbers of illegal migrants to the EU are starting to grow again,” said Czech Prime Minister Petr Fiala following the announcement. “We don’t take the situation lightly.”
“Citizens need a valid passport or identity card to cross the border,” the Czech Interior Ministry added.
The Czech policy would also be adopted by neighboring Austria, the country’s Interior Minister Gerhard Karner confirmed.
Poland had already announced its intention to reintroduce checks on the Slovak border with the number of migrants along the Balkans migration route continuing to surge. Prime Minister Mateusz Morawiecki said last week he was “instructing Minister of Interior Mariusz Kamiński to check on buses, coaches, and cars crossing the border when it is suspected there could be illegal migrants on board.”
“In recent weeks, we detected and detained 551 illegal migrants at the border with Slovakia. This situation causes us to take decisive action,” Kaminski added.
Slovak caretaker Prime Minister Ludovit Odor acknowledged the growing issue of illegal migration in his country but insisted that the problem needs a European solution rather than individual nations restricting border access.
He claimed that the decision by the three neighboring countries had been fueled by the Polish government, which is involved in a tightly contested election campaign, with Poles heading to voting booths on Oct. 15.
“The whole thing has been triggered by Poland, where an election will soon take place, and the Czech Republic has joined in,” Odor said.
Slovakia revealed last month that the number of illegal migrants detained by its authorities this year had soared nine-fold to over 27,000. The majority of detainees comprise young men from the Middle East using the Balkan migratory route through Serbia as they seek to migrate to northwestern Europe.
The winner of Sunday’s general election in Slovakia, former Prime Minister Robert Fico, has vowed to tackle the issue more robustly by promising to reintroduce border checks with neighboring Hungary.
“It will not be a pretty picture,” Fico told journalists as he threatened to use force to dispel illegal migrants detected on Slovak territory.
International
EU Wants To Pay Off Hungary To The Tune Of €13BN So Orban Doesn’t Veto Ukraine Aid
EU Wants To Pay Off Hungary To The Tune Of €13BN So Orban Doesn’t Veto Ukraine Aid
Hungary’s Viktor Orbán has long been an opponent of…

Hungary's Viktor Orbán has long been an opponent of the mainstay of EU policy on Ukraine, having also persistently criticized Kiev for discrimination against Hungarian minorities, and demanding that a 2017 law restricting the use of minority languages be changed. He's also refused to ratify Sweden's entry into NATO.
Orbán has further throughout the conflict stood against policies which escalate against Moscow, and has constantly warned against stumbling into a WW3 scenario involving direct NATO-Russia clash. He told Tucker Carlson in a recent interview that "the Third World War сould be knocking on our door so we have to be very careful." With Budapest having been a consistent thorn in the side of the EU, Brussels now wants to pay the Hungarians off.
"The European Commission is preparing to unfreeze around €13 billion in funds for Hungary to try to avoid Prime Minister Viktor Orbán vetoing EU aid for Ukraine, in a move likely to draw criticism from the European Parliament," Politico reports Tuesday.
"The Commission needs the unanimous backing of the bloc's 27 countries for an update to the EU’s long-term budget, which includes a €50 billion funding pot for Ukraine," the report adds.
Akin to what's currently going down in Washington with a group of Republicans holding up Ukraine funding, Brussels may soon have its own Ukraine aid blockage problem. EU aid for Kiev which was previously approved runs out in December, hence the urgency for EU leadership in wanting to push through a new package.
A week ago, Orbán gave a speech declaring Hungary will no longer support Ukraine in any way unless certain significant policies are changed both in Kiev and in the European Union.
He stressed in the words given before parliament that "Hungary is doing everything for peace" but that "unfortunately the Russian-Ukrainian war continues, tens of thousands of people are victims." Thus, he continued, "Diplomats must take control back from the hands of the soldiers, otherwise it will be in vain for women to wait for their sons and fathers and husbands to come home."
The Hungarian leader has stood against ratcheting Western sanctions on Moscow, instead choosing to maintain a generally positive diplomatic relationship with the Kremlin.
He also a week ago charged that Kiev and its backers have cheated Budapest by "Ukrainian grain dumping" into his country. He had also laid out, per The Hill:
... that he was protesting a 2017 law in Ukraine that limits ethnic Hungarians from speaking their own language, particularly in schools and said Hungary would not support Ukraine on international issues "until the previous laws are restored."
Needless to say EU officials are panicking, and are readying a lucrative quid pro quo with Hungary (based on freeing frozen funds related to the prior years' so-called "rule of law" punitive measures"), so that EU aid to Ukraine doesn't get blocked at a crucial moment that Washington funding is drying up.
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