Today I typed “Debt Solutions” + UK into Google and got back 57 600 hits. All these solutions suggest there are plenty of problems. In the 1990s three quarters of bankruptcies were traders...the rest were consumers. This has now reversed. The idea of bankruptcy gets the thumbs down from the wage slaving classes who see it as a trick of the feckless to get out of paying their debts...a fiendish plot open to others but never to them. They have a point.

Fairness matters in a society. But the fact that limited liability companies have been doing bankruptcy for years destroying thousands of honest small traders in the process seems to have been kept beneath the middle class radar. One answer in the UK is to give greater prominence to Individual Voluntary Arrangements ( IVAs )...legal alternatives to bankruptcy which leave you without too much of a stain on your fiscal character. Twenty thousand IVAs got the Stamp of Approval of the English Courts in 2005 and the annual rate for this year is thirty thousand.

Price Waterhouse Cooper have just finished a survey into the motivations of 6500 people who enter IVAs between July and November last year and found that 83 percent cited excess expenditure over income as the reason for failure. 56 percent of these legally binding agreements between debtors and creditors were drawn up for people in the 20-40s age-groups. Average debts were £62 000 and were mostly held on credit cards, personal loans and bank overdrafts.

As the law stands...following Gordon Brown’s rewriting of the rules two years ago...the difference between an IVA and a Petition for Personal Bankruptcy ( PPB ) is that the ( PPB ) wipes out your debts immediately and releases you back into fiscal society after 12 months...it also costs three hundred quid to file which is adding insult to injury. This is not quite what the middle classes fear. Try it more than once in your lifetime and you will probably find that the Bankruptcy Courts goes for the job-holder’s feckless view of your character and places you under a fifteen year arrangement.

IVAs on the other hand keep you on a tight rein for five years...and then cancels any remaining debts. I did some work on the history and feasibility of Clean Slate Campaigns last year and was surprised when Tony Payne assured me that UK law wipes the slate clean after five years with these IVAs. I hadn’t picked up on this...which means the fact must be well hidden. With both the PPB and the IVA you are expected to work hard and do everything you reasonably can to pay off your debts throughout the time you remain under the watchful eye of the bankruptcy authorities.

Choosing between a ( PPB ) and an ( IVA ) might look like a no-brainer if you take the view that with an IVA you live in poverty for five years while with PPB you come out from under in just one year. But I rather like our English version of the US Chapter 11 regulations because it not only addresses the problem of business cycles and temporary entrepreneurial set-backs but also makes it much harder for assets to be legally stolen at knock-down prices.

Manoeuvring hard-working businessmen into offers they can’t refuse is one of the causes of microbusiness failure. It may be legal...and the perpetrators are often admired as shrewd businessmen...but preying on honest traders is wrong and a Sane Humane Ecological (SHE) society would run these Spivs and Hustlers out of town...or in extremis get a rope and hang the bastards. The Good Old Law and the Guild Lore had the measure of the ways of businessmen.

For the country as a whole debt including mortgages...viewed not as debts but investments by the lower middle classes a generation ago...are well over the thousand million pound mark. Contrary to middle class prejudices...and Daily Express and Daily Mail ranting...only £50 million of this is credit card debt and defaults on this chunk of debt have slashed profit margins for the companies issuing the cards from 11 percent to 6 percent over the past five years.

Every society has to figure out how to get money into the hands of people who need it and people who use it for the common good rather than for private profit, squalor or extravagance. The history of Clean Slate policies from Babylonian Times to the modern day is a pretty clear indicator that the problem is probably irresolvable in principle. So every few generations it has to be grappled with.

For the past 75 years...the 1930s was awash with monetary theorising...too little attention has been paid to the who-whom issue of money. Excellent work gets done on the money problem every generation or so. The emerging cycle is Unfairness & Inequality, Remembering, War...a surrogate for slate cleaning...Forgetting, Inequality & Unfairness. Repeat ad nauseum while mopping up millions of surplus population...for King & Country. There is a better way.

Inflating the currency masks and mitigates the money problem by reducing the purchasing power of the borrower’s debts. In Human Ecology...published in 1947 and the definitive summary and conclusion from the work of monetary theorists in the 1930s...Thomas Robertson coined the phrase Minor Usury and Major Usury. Addressing the Debt Problem arising from issuing money as debt at interest moves the chairs of Minor Usury on the deck while leaving the Titanic of Major Usury untroubled. This is no reason to ignore the deck chairs. Ignorance is Power to Them. Raising public consciousness of the fundamental flaws in our monetary arrangements yields its own rewards.