UK bookshop chain Borders has recently gone into administration, which is putting over a thousand jobs at risk over the festive season. When discussions of a possible sale fell apart, an administrator was brought in to keep the stores open while a buyer was sought. As in much the same way as with an individual bankruptcy, someone is brought in to oversee the sale of assets in an effort to meet the debt repayment. In the case of Borders, the assets they have are store premises and stock. The difficult situation that is inherent to the sale of a bookshop’s stock is the likely opposition to a firesale by publishers who will make every effort to prevent having their stock liquidated. This is due to the model of sale-or-return on which most of the book trade is based.

Borders was originally founded in the founded in the US in 1971 by the Borders brothers. Borders UK was established in 2007 and has 45 stores, nine of which trade under the name of ‘Books etc.’ however, they have struggled to compete against online and supermarket sales. In fact, in the year ending February 2008, they recorded a loss of £13.5 million. If you compare this scenario to that which would affect an individual facing insolvency, the options open to the individual are far greater. At various stages of your ever worsening financial situation, there would be opportunities to seek out debt help that could halt the threat of impending bankruptcy. There are various alternatives, providing you act quickly enough to capitalise on them. If only Borders UK could’ve opted for an IVA. The Individual Voluntary Arrangement has saved thousands of people from bankruptcy, letting them keep their homes and other assets. Obviously, it’s not an option for Borders though.

Their stores will stay open while the administrators look over the books, no pun intended. Their aim is to find a buyer for the entire company but failing that, its constituent parts. HMV, owner of Waterstone’s, is a potential buyer but WH Smith has withdrawn their interest after being involved in preliminary negotiations. If you’re facing the threat of mounting debt, selling off some of your assets, perhaps downsizing your home or simply cutting down on expenditure can help to fend off insolvency. The first step though, should always be to seek out professional debt help from a specialist debt advisor. Take the free, fifteen second Debt Wizard at Harrington Brooks and find out the best solution to your debt problem.

The curse of I’m a Celebrity… Get Me Out of Here! claimed another poor victim as the former Radio One DJ Mike Read was declared bankrupt. He’s in illustrious company, joining former winners Kerry Katona, the ex-Atomic Kitten and queen of the freezer section, and ex-Eastender Joe Swash. Admittedly, Read didn’t reach the same heights in the competition as the other two. His case is more comparable with a contestant on I’m a Celebrity US, Stephen Baldwin. This points to a bit of a trend, being that a stint on the ITV “reality” television programme goes hand in hand with financial strife.

Mike Read, the onetime Top of the Pops presenter, has been declared bankrupt twice previously. The first time was in 2008, which was later annulled when he settled his outstanding debt with Horsham Council in West Sussex. The second time was in February this year when an insolvency petition was served for unpaid taxes. So, for the third time, an Insolvency Practitioner has taken charge of Read’s assets. Financial woes are nothing new for the former Radio One DJ, who regularly drew listening audiences of 17million in the 1980s. Having left the BBC in 1991, Read went on to pen Oscar, a musical based on the life of Oscar Wilde. This debuted in the West End in 2004 but was universally panned, closing after opening night at a personal cost of £80,000.

The latest cost to Read looks to be his prized record collection, 120,000 vinyl records with an estimated value of £1million. Many record collectors have deemed the vast collection of LPs to be too important to break up and the auctioneer’s guide price of three quarters of a million pounds is thought to be a highly conservative estimate of the collection’s worth. The Insolvency Practitioner is tasked with selling off your assets if you are petitioned with bankruptcy, regardless of your celebrity status. For most of us though, this would mean selling our home to service our debt, not our record collection. Insolvency is indiscriminate though. Celebrity debt may be big news but bankruptcy is a matter of public record anyway. If you are declared bankrupt, it’ll be published in your local paper; if a celebrity is declared bankrupt, it’s national news.

There have been a few stories in the media recently, telling of borrowers that have fallen victim to the unsavoury practices of some lenders. The most recent of these stories regards a mortgage lender who has been fined almost £3m by the Financial Services Authority for maltreatment of customers who had fallen into arrears with their loan repayment. Not only this, the same lending organisation has been ordered to repay almost £8m, plus interest, to 46,000 of its borrowers. The Financial Services Authority, the organization charged with monitoring and regulating the lending market, found that the lender was too quick to press for repossession of their borrowers assets. They also felt that the charges levied against borrowers who had fallen into arrears with repayments were inordinately high.

The vulnerable position of borrowers who find themselves unable to meet repayments leaves them open to a degree of exploitation from their lender. This position of power on the lender’s part can result in the pressing of disproportionate fees and charges. Essentially, the moral of the story should be that you do not enter into a contract which hinges on a repayment schedule that you cannot service. Of course, people’s circumstances can change though, particularly in the current, unpredictable financial environment. Never assume that findings of this nature will come to your rescue in adverse circumstances. As soon as you find yourself in financial difficulty, you must talk to your creditors and get some advice from a specialist debt advisor.

It is important that you fully investigate the company that you intend to borrow from. Make sure that you read all of the small print; don’t be sucked in by those advertised introductory rates. A quick search of the internet can provide some excellent word-of–mouth insights into a company’s customer service history. In this case, the Financial Services Authority examined the firm’s lending practices between 2004 and 2008. The investigation discovered that the additional charges for dealing with people in arrears were deemed to be excessive. Also, they found that in many cases, repossession proceedings had begun before other alternatives had been considered. Part of this may have been down to the staff that, it was discovered, had not had adequate training in management of arrears cases and the proper procedure for repossessions.

Although the case was investigated and refunds were made, it must again be underlined that this is not an easy way out of your debts. Indeed, there will be many other cases where this does not happen. Even in this case, we have to wonder why so much time is taken up with the enforcement process. The Financial Services Authority did know about these problems by mid 2008 but the case has only been recently settled. This is the largest fine so far levied by the Financial Services Authority against a mortgage lender and they are determined that it be taken as a statement of intent against mortgage lenders and third party administrators that are not acting in the best interests of their customers.

The Financial Services Authority revealed that they had received 1,510,000 complaints from the public between January and the end of June 2009 about the actions of some financial services firms. So the message is clear: make sure that you do your research, don’t be suckered in with introductory rates that seem too good to be true and select a lender that has an impeccable service record and a longstanding reputation. Talk to a specialist debt advisor at Harrington Brooks, which is one of the longest established financial practices in the UK. Go online to use their free debt wizard or give them a call on 0800 048 1764.

Financial Services Authority: www.fsa.gov.uk Harrington Brooks: www.harringtonbrooks.co.uk