Is personal bankruptcy the way out?

By Tameka Gordon Business reporter

Friday, August 17, 2012

Print this page Email A Friend!

The recent economic downturn has left many individuals scurrying to repay bank loans and survive its aftermath.

The total value of loan defaults was not immediately available. However, it appears that many persons now qualify for what the Office of the Trustee in Bankruptcy (OTB) calls "protection" from creditors by filing for bankruptcy.

An OTB spokesman, who opted not to be named, said filing for bankruptcy is not to be seen as a debt write off. Rather, "individuals experiencing financial difficulties who wish to be afforded time and opportunity to get back on their feet" should consider bankruptcy as an option to "staying afloat".

The stigma attached to companies being forced into receivership and liquidation has somewhat deterred individuals from filing for bankruptcy, he said.

"Many persons don't even know that individuals can file," the OTB spokesman said, conceding that the procedure has several implications.

He further explained that though the OTB seeks to minimise the disruption that may come with the disposal of an individual's assets to repay debts, its core concern is to act as a legal intermediary for individuals as they regain control of their financial life.

According to the OTB's brochure, bankrupts are "relieved of harassment by creditors as all claims for payments must be made through the OTB".

"No court action may be taken against the bankrupt without the permission of the court and interest can no longer be accrued against the debts held by the individual."

The debtor therefore gets the opportunity to "formulate an arrangement by which debts may be satisfied by periodic payments or some other means as agreed with his creditors."

Mismanagement of credit cards and the "over-extending one's finances" were also identified by the OTB as some of the common reasons individuals may become bankrupt.

The OTB official said there has been an increase in the number of queries from individuals seeking to file for bankruptcy with the comparative periods of 2006-2008 and 2009-2011 showing an increase of 31 persons filing.

It therefore urges caution and foresight in financial planning.




1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper � email addresses will not be published.

2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.

3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.

4. Please do not write in block capitals since this makes your comment hard to read.

5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed:

6. If readers wish to report offensive comments, suggest a correction or share a story then please email:

7. Lastly, read our Terms and Conditions and Privacy Policy

comments powered by Disqus



Today's Cartoon

Click image to view full size editorial cartoon