Link: US company files for bankruptcy in UK
Insolvency practitioners said last week that they are seeing more young graduates seeking advice on bankruptcy as a means of getting rid of debts incurred during studies.
Paul Davis, personal insolvency expert of Begbies Traynor, said the firm had received calls from several students considering bankruptcy.
‘We are definitely seeing an increase in volume. We are having more inquiries than we had before,’ he said, adding that most calls were to the firm’s London office.
But he said that, in most cases, the firm is discouraging them. ‘The cases are typically for debts of £10,000 to £15,000, which is a relatively small amount of money. It is silly to impair your credit record for that amount.’
Experts believe the floodgates have been opened to student bankruptcy by the government’s move to reduce the bankruptcy term from three years to one.
Student indebtedness is a major issue for government and one former Tory MP Chris Patton will have to deal with after his election as chancellor of Oxford University.
Education secretary Charles Clarke is reported to be seeking ways to block students from using the bankruptcy rules.