My involvement began during 1983 when I founded what is now the Bankruptcy Association to campaign for reform of bankruptcy laws after my eldest brother had gone bankrupt twice during a 20 year period in business. I was appalled at the way he was treated and I had also suffered serious debt problems myself whilst at university as a mature student.

Crusader of the lost cause

During the last recession in the early 1990s I was dubbed by one business magazine as ‘the crusader of the lost cause.' In fact the crusade I fought led to many improvements in the way bankrupts are now treated. Pensions of bankrupts are now protected since the beginning of this century thanks to a campaign we waged. Before then all the proceeds of pensions could be taken by trustees in bankruptcy.

Bankrupts are now also treated with greater courtesy and respect by Insolvency Service officials who administrate the bankruptcy process. Bankrupts often used to be treated in a rude and even abusive manner. Not any more.

Further reforms in bankruptcy law were also introduced in 2004. A three year discharge from bankruptcy period was reduced one year maximum and strict rules were introduced in respect of the sale of the homes of bankrupts.

Catastrophe unleashed

The greed of the banks has now unleashed on the UK and the world economy a catastrophe of unknown proportions. Bankruptcy figures are spiralling upwards as businesses and individuals fail financially in their tens of thousands. People and businesses all over the country are in real trouble. I am being contacted now by people who have been in business for decades and who survived the last recession but are unable to cope with this one, the downturn is so steep.

Famous brand name businesses are collapsing almost daily and some entire industries have been decimated. The scale of problems is breathtaking. The government has said it will not allow people to fail in the way they did in the last recession. These are largely weasel words to people out on the ground who are actually suffering. In reality, those suffering financial problems are largely left to flounder as they always have been and, no doubt, always will. Unless, of course, you are a bank

Comfortable majority

Even in the deep recession we are experiencing the majority of the population are not directly effected. Civil servants, teachers, nurses and many other professions remain safely in their jobs. Some industries are unaffected by recession and a huge swathe of retired people are not directly effected.

In some respects these groups of people are better off as inflation falls and even deflation starts to kick in. The UK remains a well off and wealthy economy even as millions of people suffer the effects of recession. This sea of well being all around makes it even harder to cope with for those who are struggling.

Sharks abound

Unfortunately, there are a large number and variety of so called debt management companies peddling individual voluntary arrangements - known as IVAs. These are promoted as though they are a sensible alternative to going bankrupt.

In very many cases IVAs simply turn out to be very expensive and painful bankruptcies. They make huge amounts in fees for those who promote them but often are of little help to debtors. Huge television campaigns are funded by the vast profits made from these schemes.

Offered as ‘free solutions,' the small prints of the contracts have many thousands of pounds in fees built into them. The position nationally with IVAs is a scandal and I have never thought an IVA an appropriate solution for anyone in the 22 years they have been available.

Fear is preyed on

These companies prey on an irrational fear that some people still have about bankruptcy. Memories of the treatment of debtors in Victorian times still linger on. These fears lead people to fall for misleading advertising regarding IVAs. Many IVA companies are now being sued for miss-selling their products. They deserve to be.

Modern bankruptcy is a very different kettle of fish today and is mainly just an administrative process, although there can be painful aspects. The family home is at risk when someone goes bankrupt. A trustee in bankruptcy cannot sell a bankrupt's home until one year after the bankruptcy but it can then be sold if there is equity in a property. The loss of a family home can cause tremendous distress and upheaval for any family.

Celebratory lunch

A businessman and his wife, both in their seventies, who recently took advice from me to go bankrupt after many years in business, emailed me to say they had gone for a celebratory lunch after they had presented their bankruptcy petitions. In the case of this couple they had already lost their home some time ago and so they were relieving themselves from the pressures of dealing with tens of thousands of pounds of debt. I emailed back my congratulations on the bankruptcy and told them to get right on with the rest of their lives.

So whilst bankruptcy can be tough, it can also offer new beginnings. Many bankrupts have gone on to achieve great things after putting a bankruptcy behind them.

Details of the Bankruptcy Association and its publications can be obtained at its website at: www.theba.org.uk or by telephoning 015394 69474 or by writing to The Bankruptcy Association, FREEPOST LA1118, 4 Johnson Close, LANCASTER, LA1 5BR