Insolvency Service
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Attitudes to bankruptcy revisited
The stigma attached to bankruptcy amongst the general public has reduced, but amongst businesses and bankrupts themselves it remains at a similar level to a previous study, according to a report published by The Insolvency Service. The report "Attitudes to Bankruptcy Revisited" looks at the results of three surveys carried out by The Insolvency Service in 2006 and 2007. The aim of the surveys was to obtain a cross section of views regarding attitudes to bankruptcy, and in particular to establish whether there is a stigma attached to bankruptcy, and if so, the reasons why.
The results of those surveys were compared to the results of similar surveys run in 2004 and form part of the evaluation of the insolvency provisions of the Enterprise Act 2002. One of the objectives of the Enterprise Act 2002 was to alleviate the social consequences of bankruptcy.
Although the opinions of bankrupts and businesses have not changed significantly since the previous surveys, the opinions of individuals have changed over this period. Only 43% of individuals interviewed thought there was a stigma associated with bankruptcy, down from 53% in the previous survey.
As regards the process of bankruptcy, the main reason for the existence of stigma is the advertisement of the bankruptcy order. This is consistent with the previous survey. As far as the effects of bankruptcy are concerned, the main overall reasons why stigma exists, and which are the same as previous surveys, are:
* problems obtaining a bank account;
* the fact of being
unable to repay creditors; and
* the effect on credit rating.
See the attached link for a full copy of the report http: http://www.insolvency.gov.uk
Notes to Editors
1. Copies of the research report
'Attitudes to Bankruptcy Revisited' can be found on the
Insolvency Service website http://www.insolvency.gov.uk
under Insolvency Profession & Legislation; I am interested in
insolvency law, policy changes & evaluation and consultations;
Policy Changes and Evaluation.
2. The following surveys were carried out:
* Survey of
bankrupts - All bankrupts interviewed by the Official Receiver in
a two-week period in October/November 2006 were asked to complete
a questionnaire.
* Survey of businesses - In November 2006, a
sample of sole proprietorships were asked to complete a
questionnaire. The sample was taken from the Inter-departmental
Business Register and designed to be representative of sole
proprietorships in England and Wales based on region, industry
type and employee size.
* Survey of individuals - In January
2007, The Insolvency Service commissioned a telephone survey of
individuals (aged 15 years and over) using a quota sample. The
sample was designed to be representative of all adults in
telephone owning households in Great Britain.
3. The Insolvency Service has a network of offices which covers
seven regional areas. The regions are based on county court area
with 33 offices covering the county court regions. As a guide the
regions are as follows:
* Anglia Region: Cambridge, Ipswich,
Northampton, Norwich, Southend, St. Albans
* London Region:
Croydon and London
* Midlands Region: Birmingham, Leicester,
Nottingham, Stoke-on-Trent
* North East Region: Hull, Leeds,
Newcastle, Sheffield, Stockton
* North West Region: Blackpool,
Chester, Liverpool, Manchester
* South East Region:
Bournemouth, Brighton, Canterbury, Medway, Reading,
Southampton
* South West Region: Bristol, Cardiff, Exeter,
Gloucester, Plymouth, Swansea
4. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent.
5. The Insolvency Service carries out confidential enquiries on behalf of the Secretary of State for Trade and Industry through Companies Investigation Branch. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.
6. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk
