Bankruptcy... Is it to easy?

repoamuse

Where do you draw the line between foolishness and fraud?

I have always been under the impression that taking credit you knowingly can't afford or ever hope to pay back is fraud.

mewbie_2

repoamuse wrote: »

Where do you draw the line between foolishness and fraud?

Where do you put accountability? Week after week we received offers of credit - a 10k cheque here, a 6k credit card there, and all just requiring a signature. Not asked for, just stuffed through the door. I don't think companies offering credit should be allowed this form of marketing - it is obviously very tempting to some.

Zelie

I think the huge flaw in the arguement that bankruptcy aids the economy is that it's everybody else who has to deal with the fallout. That might come from lower interest rates on savings or higher charges on bank accounts as banks deal with unpaid loans. It can be higher interest rates on loans and credit as creditors need to recoup the cost. Even worse, it can mean that small businesses who have been obliged to extend credit lines cannot continue without the money they are owed. It's not as simple as saying that not having bankruptcy as an easy option stifles the economy. There's a lot of give and take.

I'll readily agree that I am like many others who revile those who spend credit on frivolities and then choose bankruptcy over repaying debts. A quite different situation from a business which has gone bust because of someone else not paying them. Unfortunately it is impossible to choose which people can get bankruptcy and which not - so both of these types must have it available. But I do wish it carried more stigma and had greater penalties. To discourage the frivolous spenders and to make those considering setting up a business think long and hard over whether they can run it successfully.

olly300

leveller2911 wrote: »

Great in an ideal world....................but who pays for it????????????

Why should any bank,financial institute or person pay for someones "risk".........
Its far too easy and as for personal bankruptcy , so many people willingly go and "MAX" out every credit card they can get then go "bust". Where is the morality in that, this is the real world we live in and there should be a "punishment" to going bankrupt.:mad:

Large companies including government departments have a tenancy of paying small companies with 60 to 100 days after an invoice has been sent and even later if they can get away with it. This causes cash flow problems leading to expensive loan arrangements and large bank charges. Many small business loans use the equity people's homes as collateral.

So simply stating that we should we pay for someone else to take a business risk is not that simple.

repoamuse

mewbie wrote: »

Where do you put accountability? Week after week we received offers of credit - a 10k cheque here, a 6k credit card there, and all just requiring a signature. Not asked for, just stuffed through the door. I don't think companies offering credit should be allowed this form of marketing - it is obviously very tempting to some.

Many things are tempting, and made easy to obtain however, we have to have self control, and restraint.

Broken_hearted

mewbie wrote: »

Where do you put accountability? Week after week we received offers of credit - a 10k cheque here, a 6k credit card there, and all just requiring a signature. Not asked for, just stuffed through the door. I don't think companies offering credit should be allowed this form of marketing - it is obviously very tempting to some.

With the person who took out the debt. They created their own misery.

Business debt however is a separate issue to personal debt and as such should be treated in a different way. A business going under can be due to may external factors. Individuals although the can reem of excuses usually only have themselves to blame.

Alan_M_2

The problem as I see it is the one size fits all system we currently have.

The idea of bankruptcy is to provide a safety net to encourage entrepreneurs, the theory is the ones that survive cover the costs of the ones that don't make it.

However, the system is open for use by any member of society. As our banks decided it was a good move to lend to anyone no matter what their ability to pay there needs to be a system to deal with those that run too much up or get into trouble. Currently this is banckruptcy as we know.

The problem is this doesn't differentiate between a small business that's been taken down in a domino reaction (i.e. a customer goes bankrupt then takes you with it) and someone who's simply run up £100K on credit cards flying first class to Barbados.

It's time Bankruptcy was categorised, there should be a minimum of two systems, one to deal with businesses and a second to deal with personal, these could then be split down to fault and non fault or varying degrees of similar categories.

As it stands now, you're all tarred with the same brush no matter the circumstances. If anyone tells you banckruptcy is easy, it's not, it's a hard slog and you're basically persona no grata for 6 years.

If you then go a second time, you face not being discharged for 15 years, that's a big deal, as you can't hold bank accounts never mind obtain any form of credit, mortgage, rent etc.

It's an old system that needs a revamp, but it's necessary,

I'm a discharged bankrupt, I had a customer take down my previous business and I went from a profitable company to bust overnight without warning. I'm still treated the same as a guy who blew it all on consumer goods, despite the order not being my fault.

milliemonster

I have never been bankrupt nor do I know anyone personally who has but yes I have debts that I am paying back and would not consider bankruptcy.

However, I do think those of you who seem to be under the impression that bankruptcy is the easy way out are very ignorant. whatever the reasons people end up facing bankruptcy, I think there are few and far between who deliberately ran up debts they had no intention of paying, most people facing BR reach the point where there is no other option open to them, they have had months if not years of struggling to repay everything, fear, stress, not sleeping etc etc and I do believe that everyone deserves a second chance. Most have restrictions placed on them for a number of years anyway and most importantly, they can't get credit anymore which is a good thing.

Times can go bad for all of us, for some people there are no alternatives and no options left

neverdespairgirl

olly300 wrote: »

Large companies including government departments have a tenancy of paying small companies with 60 to 100 days after an invoice has been sent and even later if they can get away with it. .

If only it were so fast!

I got a Legal Aid cheque last week for work I did in Nov. 2003.

piggeh

ldavies wrote: »

Milliemonster, I think that it is a general sweeping statement that people are making about how easy it is however, the same as every other thread on this forum, there are a few who take the biscuit and these are the people who are reckless, giving everyone else a bad name.

Now I for one agree, in part with the comments on his thread and know 4 people personally who have gone bankrupt. only 1 of those ppl didnt sleep, made themselves ill with the worry that you describe. The other 75% ok 3 ppl went on the biggest spending sprees I have ever seen knowing that society or the law cant touch them.. all 3 are now sitting pretty on JSA, working on the sly and have more disposable income than a lot of ppl who bloody work hard to stay afloat:mad:

Is that right? damn right it isnt.. and this is a small example of the attitude of some ppl going bankrupt..easy way out with little thought for anything else.

In my line of work, I see many ppl who are struggling with day to day living and still wanting to borrow more.. how surprised are they when the bank says no! yet when you look at income and expenditure, its clear that they are living the life of riley..but hey, who am I to judge.

A lot of ppl go bankrupt due to greed and thats what upsets a lot of ppl on this thread so for you to say that ppl are ignotant is wrong.

Take a look on the bankruptcy board and we see lots of ppl trying to fiddle the system and not pay what they owe.. do they think about the ppl who have lost their jobs because of their debt?

and then say that they are honestly unhappy - again a generalisation but a fair one.

Of course they're not paying what they owe - that's generally the nature of bankruptcy!

A certain percentage of people will always fiddle the system, however you shouldn't generalise everyone into the same boat. The bankrupts I know were not out on spending binges enjoying themselves, it was a forced change of circumstance that drastically changed their financial position.

I do believe Official Receivers sometimes need to look into the background behind bankruptcy more thoroughly to pick up on anyone who is 'abusing' the system but generally I find the system fair. People take some risk in living a 'normal' life, you can't expect everyone to operate totally risk free. What if your health was affected tomorrow and you could no longer support yourself and pay your ongoing bills? You would have taken little risk, generally operated within your means, but would suddenly find yourself struggling unless you are fortunate enough to have others supporting you (which not everyone has). Likewise BR needs to restrict people to a degree to dissuade wrecklessness but at the same time needs to accomodate those where things have gone wrong and give them enough of an opportunity to rebuild their lives. The current system does both.

Out of curiosity - have you reported the people who you know are claiming JSA whilst working on the sly??