Bankruptcy... Is it to easy?

louiser123

SingleSue wrote: »

Actually Louise, I do live a life without credit...I can't stand getting anything on credit and only purchase things I can afford by saving up.

It's probably why my house is full of very old things

I can't really talk from experience re bankruptcy, I have never been bankrupt but we did get burnt in the last recession and we probably should have gone bankrupt then but the shame stopped us.

Going bankrupt would probably have saved me many years of depression, tablets and counselling too. We worked our way out of it but I can't say I am proud of it, the feeling of failure from the reposession is still with me today.

I suppose I can see things from several points of view as we have been at the top of the pile, the middle of the pile and I am at the bottom of the pile now, it makes me more rounded I think (or just completely bonkers! )

sue i completely agree with you.
i didnt mean it way it sounded i meant i bet everyone on here at some stage has bought something via credit at some point in thier life safely thinking im working i can afford it, but working and can afford it can soon change to unemployed/ill/ect and can longer afford it as you said in your post.

i think you did a great job, we were declared bankrupt by creditors after a failed iva, which the creditors set the payments knowing on our salarys we couldnt afford to keep them up, (even the insolvency guy working on our behalf said this was unfair) hence 8 years later here we are relitivley credit free except mortgage as we kept our family home by paying back the equity in it at the time over a period of four years, so in the end the creditors got thier money anyway but they just wouldnt agree to the four years to pay the original debts back or br would have been avoided.

good luck in your future you truly deserve it x

ixwood

SingleSue wrote: »

Mitchaa, there will be people like your good self, who have had very well paying jobs and have taken on finance for cars, holidays etc whilst earning those wonderful salaries. At the time of taking them out, they could afford them easily and probably thought, ah well I earn it and can easily afford the payments so why not (sure I have seen you post something similar regarding credit)...then you lose your job.

Now you have all these outgoings but very little incomings, a payment is missed here and there and before you know it, the balance and minimum payments have gone from easily affordable to blooming impossible and you start to drown in a debt you can no longer afford.

You have phone calls at all times of the day, people turning up on your doorstep, letters by the handful every day but all you can think about is trying to have enough money to feed your family and keep a roof over your head let alone paying back the horrendous amounts now being asked of you. Those nice easy payments have now doubled as you have missed a payment or two, or it has been passed to a debt company who will plague you day and night for full payment.

Your life becomes hell, you are drowning, you try to sell what you can to raise even a little bit of money to keep going, you become depressed and you feel you can't go on.

The answer is bankruptcy, a DMP would not be possible in the above scenario although some do try to go that way but you need enough incomings to actually do one.

The above scenario will be the more common one rather than the person purposely going out and buying things they really cannot afford or doing it on purpose.....those ones really are the exception rather than the norm.

As I said, there but for the grace of god go I.

That would be pretty stupid IMHO. If you choose to borrow (i.e. spend your future potential earnings), you should have cover and protection for said possibilities.

Paulgonnabedebtfree

ixwood wrote: »

That would be pretty stupid IMHO. If you choose to borrow (i.e. spend your future potential earnings), you should have cover and protection for said possibilities.

Not always possible. Insurers often seem to set things up so that they can take the premiums but have T and Cs loaded to avoid payouts.
If you are self-employed, the situation is even worse as you usually have to recive JSA to qualify for a payout - not possible if you are self-employed due to the rules about which type of NI contribution you are allowed to pay. Another issue is about PPI. Until relatively recent times, it wasn't so widely realised that PPI could be obtained from a third party rather than paying the extortionate rates offered by the original lender. Indeed, many are probably still unaware of that fact. Additionally, some types of cover may require health checks. Personally, although my health is as good as anyone's of my age, insurers often look too much at past medical issues even though they may have no relevance to the here and now. This can result in premiums being prohibitively expensive.
So, it's not necessarily about stupidity (that does sound a tad judgemental I think).

WTF?_2

Highly unlikely that one would end up bankrupt from regular loans (e.g. car finance) as a result of things going bad if the money had been borrowed responsibly. i.e. Don't take on more debt that you can comfortably afford to repay and have a plan if your income drops.

Bankruptcy is much more likely if the borrower had loaded up on debt with little thought as to what the consequences might be in the event of a change in personal circumstances.

SingleSue

It is not as unlikely as you think.

There have been umpteem people posting on here about car finance, improvement loans etc and at the time of taking them out, they were completely affordable.

Too often people think of the "It can't happen to me" scenario and that it only happens to other people because of stupidity. I had a colleague once who quite merrily took out a home extension loan and also had a sofa on finance...it took her hubby almost being made redundant for her to realise that if he did, they would be up the creek without a paddle after a few months.

As others keep saying, you live to your means (or most do anyway) and will take a decision on whether to have that new car on finance on the here and now, not the oh I might lose my job next week.

You do get the odd sensible person who will think about what could happen but they are very few and far between.

louiser123

!!!!!!? wrote: »

Highly unlikely that one would end up bankrupt from regular loans (e.g. car finance) as a result of things going bad if the money had been borrowed responsibly. i.e. Don't take on more debt that you can comfortably afford to repay and have a plan if your income drops.

Bankruptcy is much more likely if the borrower had loaded up on debt with little thought as to what the consequences might be in the event of a change in personal circumstances.

not so in my case!!

we had a car on finance needed one for work as i had to be able to use my own car as part of the job, simple 26p a mile paid from employer for that only.

a credit card each with reasonable limit nothing high or stupid, and small overdraft at the bank( unused until the problems started) and that was where it began, crisis happened (which was very traumatic and lead to redundancy for hubby, shortly followed by my loss of job due to company closure( as owner died) things spiralled out of control after a couple of months and we were trying to keep afloat by having to use credit cards to live. then were advised by our bank to take out a loan to consolidate the cards, we took thier advice and wish to this day we never had!! simple as that!
after a year or so of trying to cope and manage to pay things we sought the advice of an insolvency practitioner in the hope of finding a debt plan as a solution, creditors wouldnt freeze the interest, and wouldnt agree to the term it would take to pay off the debts,( setting an unreasonable amount and time frame but we did try that failed which we were told it would by our advisor hence we were made br by the creditors) in the end we did pay our debts off by having to pay for the equity in our home which luckily meant we still had our home, it took 4 years, if the creditors had agreed to this in the first place they would have ended up with all thier money back, instead of a small %, due to cost of everything with br. i personaly have no sympathy for those creditors they were very fast to file for our bankruptcy instead of giving us the 4 yrs we needed to repay, hence they end up with hardly anything, we paid our debts in the end it was thier choice to take that action and quite frankly i feel no guilt now!!

so yes it does happen

neas

!!!!!!? wrote: »

Highly unlikely that one would end up bankrupt from regular loans (e.g. car finance) as a result of things going bad if the money had been borrowed responsibly. i.e. Don't take on more debt that you can comfortably afford to repay and have a plan if your income drops.

Bankruptcy is much more likely if the borrower had loaded up on debt with little thought as to what the consequences might be in the event of a change in personal circumstances.

Just like to say how spot on this is. There are those who are victims of circumstance but there are alot of people who have overborrowed beyond their means.. and now want daddy (the state) to pick them up... kiss the wound better... and send them back on their way with a nice shiny dollar bill.

Oversimplification? Maybe but you cant deny this is happening in some bankruptcy cases... and in those cases the person involved should be slapped with more than 5 years cast off... they should be forced with financial lessons to learn how to live within their means....

neas

SingleSue wrote: »

You do get the odd sensible person who will think about what could happen but they are very few and far between.

If this is the case, and i think I agree with you, I believe this is very sad, that the minority are responsible... and majority are reckless.:eek:

mitchaa

Oops...

http://forums.moneysavingexpert.com/showthread.html?t=1411787

Seems to be a lot of hugs, support and well done attitudes coming from across there

Society does stigmatize you if you are a bankrupt, it's not just individuals.

Take a visa application to Australia, or a job interview in a high profile position for example. What are the chances of succeeding in either witht BR against your name?

I dont believe the police force accepts bankrupts, i doubt a financial institution would either. As i said before this was one of the 1st questions asked in my job application pack and im certain that if i had ticked that box i wouldn't have got my job. (I work in engineering so nothing to do with finance)

Ask yourself, if you were an employer would you employ someone who couldn't manage their own finances? How would you trust this individual to manage employment issues if they cant even manange themselves? You have 2 candidates for the job, both educated and experienced in the same manner, 1 a BR, the other a non BR, which candidate are you going to choose? It's a no brainer.

It follows you through life, good in the short term when your debt is wiped but 10yrs down the line you can still be suffering the consequences

There's 2 sides to every argument.

I have sympathy with unforseen circumstances, i really do, and this is what i support BR for but lets not kid ourselves here, the majority of BR cases will be to do with the keep up with the Jones's attitude rather than someone losing both legs, finding themselves disabled and unable to work.

Is personal BR a case of burrying your head in the sand? Yes absolutely. There is no other excuse for running up unmanageable debts. An individual with their head screwed on the right way would have plans and measures in place to stop BR from happening.

For example...

When you take out a £20k car loan and find you lose your job 6mths later, you dont keep the car and ignore the payments, you sell the car and pay off the remainder balance. (You also take out the appropriate cover enabling you to do this)

It's not rocket science, it really is not.

There are of course some examples, where i will have sympathy, but not many.The majority of the time it's down to an individuals negligence, let's not kid ourselves here.

And that is nothing to be proud about, which reading the other forum, seems to be the norm over there. Too much hugging going on over there, some times the blatant truth needs to be told. Just look at Simon Cowell, he has made a name for himself worldwide doing exactly this. A lot of people will hold back and keep things inside, i dont see the reason why?

I'm not a keyboard warrior, i would have this discussion face to face with anyone who was willing to have an adult civilized discussion. Actually, the canteen at work sees discussions like this day in day out and i've not witnessed 1 punch up yet. This mornings is about CSA and greedy ex's, it's all fun:D

We all have views and opinions, doesn't make them wrong.

SingleSue

It is scary Neas, I saw it when I was working...people thought nothing of putting their next holiday on a credit card, or taking out finance for a new kitchen, their excuse was that they could afford the repayments on their salaries.

I must admit that we did do a bit of that back in our early days of marriage except we didn't take loans or have credit cards, we just had Sky, a big car (paid for) that took oodles of fuel and was expensive to insure, holidays, social events etc and pretty much lived to our means...whenever we took on another commitment we always excused it to ourselves by the fact that I was on such good money.

I look on now, especially when reading these threads and see it all the time, even from the more 'sensible' people. They earn enough to cover the finance so take it on, they say to themselves their jobs are safe, their house will not lose much, they are happily married, are healthy etc but !!!!!! does happen and can happen to pretty much anyone, no matter how well prepared you think you are.

The only way to be completely safe is not to have any loans, credit cards, finance etc, even insurances against the worse fail or stop after a while.