January is a long month for most people, both in terms of the dark nights and also financially. For anyone paid monthly, your December salary arrives (and is usually spent) before Christmas Day - then you have to wait six weeks before January’s salary is paid.
The Chistmas rush
Given the hype that now surrounds Black Friday, Cyber Monday, pre-Christmas sales and then the traditional Boxing Day queues, there is always a temptation to over-spend at Christmas. This can be on buying the latest ‘must have’ presents or just generally coping with the entertaining and socialising. It is an expensive time of year.
The New Year is a time for reflection, so anyone who has added their Christmas spending to a long list of credit card debts or taken out expensive short-term finance, may need to assess their financial position.
The latest insolvency statistics for Northern Ireland for Q3 2015, which relate to the period July, August and September, show that there were 199 bankruptcies in the quarter, which is down 34.3% on the same period last year and the lowest number since Q3 2009. There has been a steady decline in the number of bankruptcies since 2009, the height of the recession.
Therefore it may be safe to assume that as the economy is improving and oil and commodity prices are falling, there has been an increase in everyone’s disposable income. With the prospect of rising wages and interest rates remaining low for the foreseeable future, it would appear that the bankruptcy option is no longer as popular as before.
It is in this context that there have been recent developments in the Republic of Ireland regarding their bankruptcy laws. In 2013 the period of bankruptcy was reduced from 12 years to three years, with a current proposal to reduce this to one year. Mirroring that of Northern Ireland, this would remove ‘Bankruptcy Tourism’ for good.
However, it is felt that the change is also required as there are still a large number of individuals in the Republic of Ireland whose personal finances are in disarray. For anyone who has the burden of debts which they are unable to repay, bankruptcy can be the right option and one which allows them to move on with their lives in a very positive way.
Therefore, as people review their finances at the start of a New Year, this may be the opportunity to seek professional advice and deal with the debt burden you have been carrying for a number of years. Bankruptcy should not be entered into lightly and is only the right option in certain circumstances – but, unless you obtain the correct professional advice, you will never know.