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People file for bankruptcy because they're in debt. The more debt there is, the more bankruptcies there are. Well, duh! It really is that simple. When compared to the level of borrowing, the rate of bankruptcy has remained fairly steady. In 1977, 74 bankruptcies were filed for every $100 million of consumer debt. In 1997, 73 bankruptcies were filed for every $100 million of consumer debt. Bankruptcy isn't the cause of debt but rather is the result. And it isn't the disease but rather is one of the cures. Restricting access to bankruptcy court won't solve the problem of debt any more than closing the hospitals will cure a plague.


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It has been estimated that Brits, who are experiencing problems with debts, have unsecured debts of £25billion pounds. Debt management company TDX Group estimates that one million people are struggling to cope with an average of 25, worth of unsecured debts out of a total UK consumer debt mountain of 1.4 trillion pounds. That could see the number of people taking out individual voluntary arrangements (IVAs) - an alternative to bankruptcy, - double this year.

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