Bankruptcy

[coppercrutch]

People need help for different reasons. Some smoke, some drink, some can't handle money. I fall into the third category by my own admission.

 

I know I feel I wasn't educated enough in my teens/early 20's to deal with the outbreak of junk mail that suddenly started appearing offering me ?'000's right away. I can still remember when I was a kid it was Access or Amex and nothing else could get you in debt and you needed to be pretty much middle class to get a card! Bloody tories and their free for all!!!

 

I did economics at school but I didn't realise that I was supposed to utilise my knowledge of how to work out the Gross National Product of Bolivia in order to work out the knock on effect of accepting the offer of a car, holiday, loads of nights out and material objects when I was younger and more reckless It's only now that (i hear) schools are trying to educate kids not to spend unless they have it. I bet that's only because the government has only started to realise what a mess the last 20 years has got this country in.

 

Believe me, my youth has had a knock on effect (I'm 35 now) and I still struggle badly from time to time. As it stands I won't be debt free 'til I'm 40. I'm self employed and if I can't work I'll be fecked big time.

 

I agree people should take responsibility for their own actions but it takes the banks to say yes to you. I mean if you thought you could get ?1m just by asking you would, wouldn't you??? I've also been economical with the truth as far as earnings/outgoings are concerned. The figures could have been verified easily but the banks were so greedy they didn't even check! My fault? Yes, to an extent, but it could have easily been spotted by pressing a button on a keyboard.

 

Banks and other financial institutions MUST take their share of the blame for their greed (as has been alluded to with NR). The difference with the banks is they can afford to turn the screw or legally screw the punter for their decisions.

 

I see where you are coming from. The banks have to take responsibility as well as the individual. But at the end of the day you signed on the dotted line. No-one put a gun to your head.

 

The banks have been idiots in this whole mess.

Individuals have been idiots in this whole affair.

 

I, and other sensible people, should not pay one penny due to this bubble. But at the end of the day we probably will.

 

That is scandalous. My money is essentially being stolen by people who have not got the same level of self control as I do. The next 5 years will be a wake up call to those in this country who have been reckless. They will be taught a lesson in real life. That is probably a good thing.

[Uberjambo]

I see where you are coming from. The banks have to take responsibility as well as the individual. But at the end of the day you signed on the dotted line. No-one put a gun to your head.

 

The banks have been idiots in this whole mess.

Individuals have been idiots in this whole affair.

 

I, and other sensible people, should not pay one penny due to this bubble. But at the end of the day we probably will.

 

That is scandalous. My money is essentially being stolen by people who have not got the same level of self control as I do. The next 5 years will be a wake up call to those in this country who have been reckless. They will be taught a lesson in real life. That is probably a good thing.

 

Most definately. You have to experience the bad to learn from it and not make the same mistakes.

[Coco]

The cutting down of the bankruptcy lengths was one of the stupidest decisions in financial history as far as i'm concerned.

 

Entrepreneurs do not always succeed with their first invention/service/plan or whatever.

 

The fear of failure in this country may well be one of the reasons for the low business startup rates etc. Making bankruptcy/administration easier may actually help long term growth rates. As of course would cutting the ridiculous size of the public sector in this country but that's another issue.

 

With regard to the OP, I suspect that better advice than on KB should be sought - the likes of Citizen's Advice should be able to point in the right direction.

[Dusk_Till_Dawn]

The next 5 years will be a wake up call to those in this country who have been reckless. They will be taught a lesson in real life. That is probably a good thing.

 

That's about the first sensible thing you've said on here. Well done

[pie_man_out]

I deal with debt at work, and some people owe ?250,000 to 20 creditors or so, and pay ?1 a month to each of them.Wont ever get it paid off but stops them going bankrupt which is a good thing..

 

When people make themselves bankrupt the people they owe money to lose out as well.

 

 

This is not strictly true. Depending on the circumstances creditors will ask for regular up to date income and expenditures from the customer. After each quarter or however the different companies deal with this they will always look for an increased offer especially if the customer is in employment.

 

Legal action will be taken for people who refuse to up their payment.

 

The op should get his "mate" to phone all his creditors and ask to talk about arrears on the account. He may be surprised at how leniant the companies are and what they will offer him.

 

The last thing the OP wants though are his finances handed to external agents. They will stop at nothing to get their cash.

[Das Root]

In this case, avoid transferring assets - both parties could face jail for fraud!!

 

Bankruptcy stays with you for life - you always have to declare it even when applying for jobs! You can forget credit ever!

 

A Trust Deed (Scotland) (pay 3rd party for 3 years)/I.V.A. (England) (pay 3rd party for 5 years) should also be avoided, if possible. You have to sell all houses/cars/goods over a certain value, pay 3rd party any bonuses/overtime during the period + it still appears on your credit report for years after the payment period (you pay all your disposable income to that 3rd party). Most of the debt is written off - but the stigma is with you for years. You can forget credit while it is on your credit report.

 

Best advice I could give is be straight with your creditors. It is in both sides' interests to allow you to pay everything back over a long period.

 

 

 

Not essentially true. Bankruptcy laws have changed so if you can discharge yourself (ie pay the agreed amount) you can come out of bankruptcy in as little as 12mths. However they ain't stupid so doubtful the OP would get away with transferring all his assets then 24hrs later going bankrupt. Plus you get yourself a wee article in the Scotsman and other papers saying you've gone bankrupt, which wouldn't exactly be a good thing. But once you are out you have clean credit, it's not the stigma it was since CC's days of debtor prisons and the gallows

 

You can go bankrupt by simply filling out an online form btw, or sequestration as it's called in Scotland.

 

However what the OP needs to get his mate to do is find a decent IFA and look at a Trust Deed. What is said above isn't exactly accurate. Homes, cars, etc can be kept out of the agreement as that's what it is, an agreement between creditors and debtor. How much of what is owed is to be paid back, in how many installments and over how long a period. You don't go bankrupt, it's essentially "one loan for all debts" and must be agreed by 75% of your creditors for all to have to agree to it. The IFA setting it up will lash on a fee which is then part of the debt, usually a %, but best to use an IFA as they talk the language and can get the better deal.

 

And as they say, if you have the Sheriff's boys at the door, don't let them in, they can't kick the door down and start taking stuff no more. Plus spouse, kids etc etc bank accounts can't be raided for recovery as they used to be.

 

Debt is debt, yes all should be paid but sometimes situations do not allow this to be so and no you shouldn't run away from it but negotiate with creditors for a fair agreement that all parties are happy with. And remember all major debt is underwritten by a 3rd party so the bank or credit card company are not losing out as they reclaim the rest from insurance and the insurance boys get theirs from premiums paid for other debt that isn't Trust Deeded etc, while banks use all our hard earned to speculate and make them more, sometimes losing it as with SocGen or Barings. Plus Gordon Brown will happily hand over ?50bn in public money around election time if a bank gets a bit squiffy so really it's all good.

 

http://www.moneysavingexpert.com/ is good for everyone, debt, savings, best deals on cards, cheap flights, worth signing up for the email.

 

And CC if you want a go at being a bit of a loan shark you should try social lending, Zopa being a very good option. Make your money work for you, see how the other half lives eh

 

http://www.zopa.com

[david mcgee]

I see where you are coming from. The banks have to take responsibility as well as the individual. But at the end of the day you signed on the dotted line. No-one put a gun to your head.

 

The banks have been idiots in this whole mess.

Individuals have been idiots in this whole affair.

 

I, and other sensible people, should not pay one penny due to this bubble. But at the end of the day we probably will.

 

That is scandalous. My money is essentially being stolen by people who have not got the same level of self control as I do. The next 5 years will be a wake up call to those in this country who have been reckless. They will be taught a lesson in real life. That is probably a good thing.

 

Absolutely spot on.

It takes two to tango.

But only one side will suffer, the banks customers.

The banks will still make profits in billions and they will still pay their top execs massive bonuses. Shareholders will lose out and pension funds will be hit hard, in other words joe public will take all the flak for banking mismanagement.

Bankers are Wh@nkers.

[JamboJen]

Absolutely spot on.

It takes two to tango.

But only one side will suffer, the banks customers.

The banks will still make profits in billions and they will still pay their top execs massive bonuses. Shareholders will lose out and pension funds will be hit hard, in other words joe public will take all the flak for banking mismanagement.

Bankers are Wh@nkers.

 

Surely what you mean is Joe Public is taking the flak for banking and the rest of the Joe Public's mismanagement.

 

As you said, it takes two to tango.

 

My opinion on the OP's mate is that he should be straight with those he owes money to, and see where things can go from there. Bankruptcy for the sake of it is IMO completely cowardly and foolish.

 

Unfortunately, people will only see the downside of it once they've actually done it, which doesn't help to educate anyone about proper money management.

 

Agree with other sentiments though that something has to be done about the lending policies in this country.

 

Not long after my birthday I started getting Capital One brochures through my mum and dad's door, and now that I'm almost 22 I get many more.

 

Fortunately a decent part-time job at Tesco and a relatively small student loan of roughly ?10k over 4 years means I don't have any money worries. Maybe it's because my dad understands money pretty well and makes sure I'm putting money into decent ISA's every year, but then I've never been one for spending what I don't have.

 

More young people need to be taught that, as I have seen far too many students blowing their loans on drink and clothes in 2 days with nothing coming in for the next 3 months. For most students, it's the first time they've ever had access to decent amounts of money. As a schoolkid I had my paper round, at ?12 a week it taught me how to save for what I wanted. Probably also helps that my parents only ever bought me what I needed as opposed to what I wanted.

 

Lots needs to be done at all levels to improve the nation's finances. It's gonna take a while though.

[Jimmy McNulty]

No offence but I hate people like your mate. Classic example of what is wrong with this country today. No-one is prepared to take responsibility for their actions. People should go to jail for things like this. He got himself into this mess, he should get himself out of it.

 

 

Word.

 

A member of my extended family got off paying the Canadian Gvt $80K in due taxes. Yet my wife and I have to pay off every cent of our $70K federal student loans.

 

He gets rewarded for running up debt buying toys and gambling. Yet we get no help when we run up debt for education.

 

****es me off.

[coppercrutch]

Not essentially true. Bankruptcy laws have changed so if you can discharge yourself (ie pay the agreed amount) you can come out of bankruptcy in as little as 12mths. However they ain't stupid so doubtful the OP would get away with transferring all his assets then 24hrs later going bankrupt. Plus you get yourself a wee article in the Scotsman and other papers saying you've gone bankrupt, which wouldn't exactly be a good thing. But once you are out you have clean credit, it's not the stigma it was since CC's days of debtor prisons and the gallows

 

You can go bankrupt by simply filling out an online form btw, or sequestration as it's called in Scotland.

 

However what the OP needs to get his mate to do is find a decent IFA and look at a Trust Deed. What is said above isn't exactly accurate. Homes, cars, etc can be kept out of the agreement as that's what it is, an agreement between creditors and debtor. How much of what is owed is to be paid back, in how many installments and over how long a period. You don't go bankrupt, it's essentially "one loan for all debts" and must be agreed by 75% of your creditors for all to have to agree to it. The IFA setting it up will lash on a fee which is then part of the debt, usually a %, but best to use an IFA as they talk the language and can get the better deal.

 

And as they say, if you have the Sheriff's boys at the door, don't let them in, they can't kick the door down and start taking stuff no more. Plus spouse, kids etc etc bank accounts can't be raided for recovery as they used to be.

 

Debt is debt, yes all should be paid but sometimes situations do not allow this to be so and no you shouldn't run away from it but negotiate with creditors for a fair agreement that all parties are happy with. And remember all major debt is underwritten by a 3rd party so the bank or credit card company are not losing out as they reclaim the rest from insurance and the insurance boys get theirs from premiums paid for other debt that isn't Trust Deeded etc, while banks use all our hard earned to speculate and make them more, sometimes losing it as with SocGen or Barings. Plus Gordon Brown will happily hand over ?50bn in public money around election time if a bank gets a bit squiffy so really it's all good.

 

http://www.moneysavingexpert.com/ is good for everyone, debt, savings, best deals on cards, cheap flights, worth signing up for the email.

 

And CC if you want a go at being a bit of a loan shark you should try social lending, Zopa being a very good option. Make your money work for you, see how the other half lives eh

 

http://www.zopa.com

 

I think most people are pretty dumb when it comes to money so the last thing I want to do is lend them money.

 

And contrarary to what you state above it is never 'all good'.

 

The same people always end up paying. And that is us lot who don't have debt, never been on the dole, and have worked all our lives paying taxes. It is totally unfair.

 

It may sound harsh but if idiots out there who have racked up huge debts end up homeless then so be it. For once it will be the actual people who took the risks in the first place paying for it.

 

There is only one 'fair' amount to pay back. 100%.

 

If it is any less the rest of us end up paying. The more banks/insurance companies have to write off for bad debts the more they will charge those that do pay. End of story.

 

I don't really think I should pay extra on my car insurance coz some **** in Lasswade decided he wanted a faster car and in the end could not pay for it.

 

That is what happens in reality. We are all being ripped off by these fools. Let them pay it off for the rest of their lives. That is fair. I don't give a flying **** if they feel they are 'burdened with debt'. That is exactly how they should feel.

[blondejamtart]

Again, I can only agree with CC. I've had personal experience of this in the past, and so has my husband, who used to run his own small business. We've been ripped off on a number of occasions by people who simply shirked their responsibilities and ran away from their debts, owing us money. One example was an Edinburgh pub owner who owed my husband a considerable sum, but declared himself bankrupt - only to pop up a few months later running another pub! (Yes, go on, you tell me how he managed to get away with that one too!) Unfortunately, in those kind of circumstances, private individuals or small businesses are right at the bottom of the pile when it comes to getting your money back, so you've got no chance - out of pocket through no fault of your own, while the person who ran up the debt in the first place takes what they see as the easy way out. It infuriates me, to put it mildly!

[Uberjambo]

I think most people are pretty dumb when it comes to money so the last thing I want to do is lend them money.

 

And contrarary to what you state above it is never 'all good'.

 

The same people always end up paying. And that is us lot who don't have debt, never been on the dole, and have worked all our lives paying taxes. It is totally unfair.

 

It may sound harsh but if idiots out there who have racked up huge debts end up homeless then so be it. For once it will be the actual people who took the risks in the first place paying for it.

 

There is only one 'fair' amount to pay back. 100%.

 

If it is any less the rest of us end up paying. The more banks/insurance companies have to write off for bad debts the more they will charge those that do pay. End of story.

 

I don't really think I should pay extra on my car insurance coz some **** in Lasswade decided he wanted a faster car and in the end could not pay for it.

 

That is what happens in reality. We are all being ripped off by these fools. Let them pay it off for the rest of their lives. That is fair. I don't give a flying **** if they feel they are 'burdened with debt'. That is exactly how they should feel.

 

I agree with you on the example quoted but it isn't always black and white. How should a guy feel about being bankrupted and losing a house when he has a young family. His debts are business related and stem from being shafted by others.

[portobellojambo1]

Anyone know the ramifications?

 

A mate of mine wants to transfer house, car etc into his missus' name, then declare himself bankrupt to try and avoid some other debts. I've told him to be careful as I'm not so sure you can walk away scot-free. Does anyone know?

 

I think your friend has to very careful. What he is trying to do is cop out of paying debts, debts that one can only assume he had no qualms about running up at the time, now when it comes to repaying those debts he is looking for a get out clause. He is clearly not bankrupt, as he has assets which when converted to liquid cash could go towards repaying those debts. By transferring assets to another family member he is effectively contemplating fraudulent activity, which could have serious implications on him and those other family members (i.e. his wife) who could become implicated by association.

 

Much better idea is for him to scale down his outgoings, and speak to those to whom he owes money, and arrange manageable repayments over a suitable length of time.

[david mcgee]

As someone once said...

" A banker is someone who will lend you a brolly when the sun is shining and will ask for it back when it starts raining"

[coppercrutch]

I agree with you on the example quoted but it isn't always black and white. How should a guy feel about being bankrupted and losing a house when he has a young family. His debts are business related and stem from being shafted by others.

 

There are of course situations when people are in positions through no fault of their own. So perhaps 100% was a little too much.

 

But I still do believe that the vast majority who try to get away with cancelling/reducing debts have simply just been stupid.

 

How about 99%.

[stevie]

my mate and i run our own gas/heating company and are always very very wary who we do work for,my mate ended up selling his house the last time he worked for himself because of one barsteward he had been doing work for declared himself bankrupt and did a runner. ps :dont get me started on the to55ers who refuse to pay thier bills.