28 years old and bankrupt

beach_3

Excellant post, you should write a book

GoFigure

For those of you who are struggling to repay 100% of your debts you should console yourself with the fact that bankruptcy is still not the easy way out of debt unless you have no income and no assets.

Liz will find out that the whilst she is discharged from her bankruptcy within 12 months this only means that if she wins the lottery she can keep the money. Her house can still be sold within 3 years of the bankruptcy starting, and an Income Payments Order can also run for up to 3 years from the start of her bankruptcy - which means that she could still be paying money back to her creditors for 3 years.

Looking down the road she is going to find it hard to get into credit problems again because it will be hard for her to borrow money. All the credit reference agencies will store the fact she was bankrupt on her credit file and most high street mortgage companies will not lend to a discharged bankrupt until they have been out of bankruptcy for at least 4 years. If she wants a mortgage sooner she will have to find a good deposit, and pay a higher rate of interest to a specialist lender.

Liz will also find it difficult to get unsecured credit at a reasonable rate, if at all, and it will be a slow process of building up her credit profile again which could take many years to reestablish.

And, if she goes bankrupt again within 15 years it will be a period of 5 years before she is discharged, not 1.

Those people who do struggle to repay 100% of debts via a DMP or IVA etc. will ultimately be rewarded with a better credit profile, and the ability to be 'rehabilitated' back into the credit mainstream again sooner - and will also be more likely to have learnt from their experience and not get into debt troubles again because they have done the hard graft to pay back more or all of their debts.

If Liz is unfortunate enough not to have learnt from her experience the first time round, she will still be facing a lot of stress and heartache if she gets into debt again, because very few people go through bankruptcy without it having a lasting effect on them. People I meet with still suffer self-confidence issues and guilt many years after becoming bankrupt and beat themselves up emotionally about something which their creditors have probably long-forgotten about.

Juni_3

GoFigure wrote:

If Liz is unfortunate enough not to have learnt from her experience the first time round, she will still be facing a lot of stress and heartache if she gets into debt again, because very few people go through bankruptcy without it having a lasting effect on them. People I meet with still suffer self-confidence issues and guilt many years after becoming bankrupt and beat themselves up emotionally about something which their creditors have probably long-forgotten about.

The point that some other posters have tried to make is that there is a "new" breed of debtors who seem to think that they only need to pay money back if they want to.

I certainly see this attitude amonst my nephews and neices time and time again.

These people won't beat themselves up emotionally as they don't see it as their problem.

Thefunkygibbons

Dudley boy has 69 thanks

oo-er

lynzpower

Ive read the article, and to be honest, I just cant get my head around it. :eek: Statements like :
"I was now £20,000 in debt and sinking. I thought the best thing to do would be to cut up the credit cards and apply for a loan to consolidate my debts.
This worked for a while until I got myself another credit card"

Having owned a number of credit cards, surely the psychology of shopping with a STORE card is i cant really afford this, i know ive had one ( long gone thank god) but you can ONLY buy clothes with the majority of them - SURELY A LESSON IN THE OBVIOUS! I cant afford these trousers? Oh stick them on the store card. I only pay a fiver a month etc. New shoes for work might be one exception I can think of with store cards, but nothing else.

I got one like a muppet for 100 quid from topshop as I saved 5% of whatever, but obvioulsly when your paying a fiver a month adn the balance is the same month in month out, surely a penny drops?

It does naff me off that some people dont give a damn on all the rest of us paying stuff off, and the interest rates changing accordingly. I havent had to do too much money saving in fairness to get things under control where I can see the end of the debt but Ive sacrificed clothes, meals out, holidays, presents for mates birthdays, expensive food, taxis and so on.

My sister got into all this state with credit cards and mummy and daddy paid it off and made her pay them back ( they didnt want the risk associated with thier home, so they took out a second mortgage) Now my parents have given her a credit card "for emergencies" and she currently owes 3k. Seriously, there is evidence from this that some people just never learn.

skintchick

jesster wrote:

As someone who's trying to support an OH through a genuine potential BR, I too was really irked by Liz's attitude.

But let's not slam the bbc for choosing HER story to report.

Who's to say they expect us to be sympathetic with her? The bbc has to be seen to be impartial and unbiased, and to let people make up their own minds about a story. But they do get to choose their 'case study' for the article. It would be just as easy, if not easier, to find someone who's gone BR for more genuine reasons. But by choosing someone like Liz the writer's making a point about abuses of the system - and starting our debate - without being seen to make the judgements.

In a way they get to choose, but also they can only feature people who are prepared to talk, and they may have been on a tight deadline, and she was the best they could get?

ash333

beach wrote:

Excellant post, you should write a book

If you like my posts beach then click "Thank You"!


Ash333

tankgirl1

wow- have just happened upon this thread via post of the month nominations.

excellent thread- very thought provoking. I myself went BR at the age of 25, it being the last available option at the time, due to circumstances which i do not wish to go into. however, i do think bankruptcy is getting abused by some people, and 'liz's' case was an example of this. was she still able to work? if she was, then i see no reason at all for her to file for bankruptcy. also, i think bankruptcy laws should be less leniant - i was discharged after just 9 months! :eek: i find that shocking- i was expecting at least 3 years. but it would appear, that the goverment, in their wisdom, have actually lowered the amount of time before discharge ....

i would like to add that i have learnt an awful lot from my bankruptcy, and am now exceptionally frugal and careful.

cd02

ash333 wrote:

If we can all manage it, why can't she.

For a 17 or 18 year old (i couldn't be bothered to work it out to the day), aren't you a bit young to be commenting on something that I can't see you dealing with at your age ?

GoFigure wrote:

For those of you who are struggling to repay 100% of your debts you should console yourself with the fact that bankruptcy is still not the easy way out of debt unless you have no income and no assets.

I have income and some assets (small but some) but yet I've been advised by PAYPLAN and CAB that bakruptcy is the only way out for me, the only way I'm going to be able to try and make something of my life before its too late !! Sorry but really don't agree with your comments.

retrieverrose

sparkle84 wrote:

Could I ask then Bunny what did you spend 50,000 on?? I too am with dudley on this I have notice recently that say 3/5 posting on here has "I am off work due to depression/stress etc etc - I am not a burning martyr but when I had cancer last summer I went back to work while having chemotherapy so I could sign up with CCCS and have a surplus income to start a DMP - have a little think about that while you off feeling depressed

I am really sorry to hear that you have been through such a rough time but please don't be so disparaging about people who have depression, it can be as debillitating as a physical illness and whilst I don't think it is necessarily an excuse for getting into debt it certainly makes it very difficult to face up to problems. I would hate to think that people would be put off from posting for help and advice because they think they won' be treated sympathetically.