Bankruptcy, and the joke it has become

[WildGoose]

was listening to Jeremy Vine on Radio 2 today, they were discussing the current debt culture and the estimated figure of thousands who will declare themselves bankrupt in the first 3 months of 2007

one guy who called in, racked up 56k of debt on credit cards, declared himself bankrupt, didnt have to pay a fig, and was quite un-remorseful about it, he was off the shit list in 9 months he said, with a fresh start, how can we possibly allow this?

his excuse was basically he moved to london from bognor regis and was a country bumpkin, used to get his hair cut at harrods, go to spearmint rhino's, party at stringfellows, and spend up to £650 quid a time on impressing 'dates', claimed he thought that he would be able to pay it all off no problem as he was doing well in his career, didnt sound like a knuckle dragger either, came across as reasonably intelligent, apart from his total disreagrd for accepting responsibility

i dont pretend to be hard done by, but it would never occur to me having got into that amount of debt (not that i would in the first place, voluntarily) to look for the easy way out, and get someone to write it off, dont think i would be able to live with myself

apparently students are being advised to do similar things, live the life of riley at uni, up and up the student loan, then "ooh i am bankrupt, sorry"

but people are doing this! and not giving a toss! so much so that its becoming a totally acceptable way to behave... personally it boils my piss, and is just another statement about how shitty this country is becoming

i dont blame people for their mistakes, but i would ask that they pay for them in full, and where necessary... with interest, otherwise how do you learn

this just takes the biscuit!

dont normally take an interest in current affairs, but the legislation that makes this possible must have been written on the bottom of a beer mat
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[phantomtek]

I totally agree, although I was told at school that you can't actually do this anymore to get out of Uni fees, that the loophole has been closed.

I believe in paying your own way in this world, why should some of us have to work hard and get nothing and the layabouts get everything for free?

It's not right, but unfortunately, it is the case, across the board.

[Davo]

It does take the piss (e.g. the guy referred to). Bankruptcy used to be the absolute last resort when it came to overwhelming debts, however since 2004 (I think) it's been made bankrupt, discharged between six months to a year later.

I'm suprised the guy in the radio article got off so lightly, I've heard of similar cases being subjected to a bankruptcy restrictions order and being kept like that for 15 years.

As Phanny said student loans are exempt from bankruptcies and still remain payable.

[Ste]

Chances are, as well as having tens of thousands of pounds of debt just written off, a couple of months ago he reclaimed bank charges totaling a couple of thousands whilst complaining loudly about how banks are such a rip off.

Ah well, other than free banking slowly drawing to a close I'm interested what else is going to happen so that those with massive amounts of debt aren't just being paid for by the rest of the population as is the case now.

[colin1]

i have an ex who owes me money who talks about going bankrupt as a way of getting out of her debts

however my current girlfriend is a lawyer and says that even after you declare yourself bankrupt, creditors can still claw money back and can actually get it deducted at source from your wages in some cases

also people who have gone bankrupt cant get a mortgage, which is a major consideration

my house earns more money a year than me, so getting a mortgage has improved my net worth no end.

i suspect the radio story may have given a one sided account to make it an interesting story

however, i suspect that going bankrupt and then changing your name may be more effective for evading debts

[Paivi]

Those of us who are regulated by the Financial Services Authority are not allowed to go bankrupt.
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[Itchy]

We have our fair share of fucktards on BCF too , this guy who got into 24K of debt
and was still in an IVA decided to go buy a new bike.

Still bankruptcy affects credit rating forever , so when you come to make the big
purchase say a house , they may bump +1 or 2% interest to 'cover themselves'
under a probably illegal but ignored cartell (note insurance already operates a
cartel of sorts which is ignored by the government ie almost all of them have a
+£150->£250 for <25 and +500 if you are under 21). +1 or 2% doesn't sound too
bad but when you consider a 100K mortgage will generally cost you 180K 1-2%
is a very large amount indeed.



I think what will happen is they will (and get banks own UK plc) lobby to get debts put into the same bracket as
student loans ie you can't bankrupt your way out of them , and they will eventually end up taking it straight out
of your wages.


Or in future they'll just go all Japanese , ie ask for guarentors ie if the young as
seen as a huge risk (as with motor insurance) they'll just ask your parents to
act as guarentors , so if you can't pay it they go after your parents.
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[Kickstart]

Hi

Doubt that they can get debts to be counted out from bankruptcy.

They might well go for more security on loans, and they used to insist on it far more. Maybe when they loose more money they will go back to this.

Think in Aus the rules are that if someone is given a loan that they cannot reasonably afford and they default on it then the bank forfiets the money. Makes them somewhat more careful over how much they will loan to who.

Trouble is that the UK economy largely only looks healthy due to the current levels of debt.

All the best

Keith
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[Itchy]

[Louise]

I asked around for advice on my debt situation months ago. I only owe 10k which, really is nothing to some people. Im paying it off fine, after all I ran the debt up so I'm paying it off.
However, some guy on the 'get out of debt' phone line help told me to go bankrupt 'it will only last 5 yrs on my record'
I couldnt beleive it. Pppffttt

[msgander]

[McJamweasel]

This is really annoying, especially with regard to how long the ill-effect can last. A few years ago I got into trouble over just a few grand - I payed it off but am still fucked with a bad credit rating - one that lasts for 6 years. Even though I have been faultless since I began paying off the debt I still cannot get even a new bank account.

However, if I had just declared bankrupt I would now be free of the ill-effects - not to mention a few grand better off as I wouldn't of had to pay off those debts and my student loan would of been cancelled instead of hanging over me like a £12k cloud.
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[colin1]

[carvell]

If it wasn't his fault as you say, then he would have had a note to that effect on his credit record, so getting a mortgage etc. would have been fine.
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[Villers]

or how about current legislation that allows up to 75% of your debt to be wiped out?

There was a member on here recently who did such a thing. Racked up 30K+ debts then only pays off 12-13k on an arrangement. Not very fair to those of us who pay our DD's every month and only spend what we can afford is it?

They wonder why we have such a large national debt too.

Weird thing is though I got turned down for a credit card because all I do is use the interest free then cancel it. Guess I dont rack up enough debt to be interesting to the companies!

My ex gf worked for a finance company, the people they dealt with (like 'Yes car Credit') and similar vultures used to charge an interest rate that suited them, people were paying 5 grand for 1500 quid escorts over 5 years. The world has gone to shit, theres faults both sides!!

But, the writing off of debt makes my blood boil over.
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[hybrid]

the reason the people at "yes car credit" had to repay so much was due to they're financial status.

They had little or no credit rating, unable to get a loan from other companies, they ended up borrowing money from a lender who charged more because of the risk involved.

What you have to remember is that these are not prime candidate for credit cards, so to cover themselves they charge slightly higher than average interest.

Then, also because they had a lower rating, they would lower the monthly installments, so that they were at a managable level, so if it took five years, it took five years, but it was all agreed in the initial contract that was signed.



On another note, if i remember correctly, the uk has a debt of £1trillion. unlike the public, i dont see the government being able to write this off, i wonder who will have to pay or the bit that doesn't get paid?

[Kickstart]

[cc123]

That thing about writting off 75% of your debt, I don't think that applies in Scotland does it not?


Its bloody sickening. Its more or less a crime, I would see it as stealing from a company. They should throw the book at these people but at the same time its all to easy for anyone to get in debt and banks are only to willing to hand debt out.


I was sitting at about 12k worth of loans and cards about 2 years ago, its all paid off now. The only debt I have now is my mortgage and my GF doesn't owe anything out either, best way to be. We've made a few quid already on our house...
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