Bankruptcy should not be for life - Your support is needed!

4$£&*(£$&*(!

To the critics - there is such a thing as rehabilitation. Six years is a long time, if someone is intentionally reckless my suggestion of leaving a note on a record for six years is long enough to prove if they are going to be reckless again. I'd argue for most, and I say most because there will be BRO's etc., six years and bankruptcy dropping off credit references is enough to justify the removal from the gazettes and not warrant a declaration to financial organisations.

Criminal convictions do not have to be declared after a spent duration in most circumstances, so why should a bankrupt have to? It affects people who have never had money problems too, including myself, as I am forced to pay higher household insurance premiums yet otherwise I am an extremely good risk for insurers.

Let's not criminalise people for life, and to those attacking remember the ethos of this board is not to judge. I really hope the ethics of the overall suggestion are taken seriously and leads to changes in legislation.

Merlinexcalibur

Like I said I've 'switched sides'. I know what it is/isn't. And I have also removed some posts I made earlier ... defending. I have decided to try a different approach.

My reply is based around this comment:

There needs to some kind of warning to future lenders, but bankruptcy should be even more of a last resort than it is now.

mrcow

dvs wrote: »

We are not criminals yet we are treated worse than them. Spent convictions do not have to be declared but a bankrupt is a bankrupt for life.

Bankrupts are not treated "worse than criminals".

They are just treated as bad investment risks - which is exactly what they are.

If I was considering lending a large amount of money to someone, I certainly would want to know if they'd ever been bankrupt before.

As for some sort of rule about not having to declare it......if a lender makes a point of asking whether a potential client has been bankrupt in the past you'll have to answer anyway, rules or no rules. Anything less than that would be fraud.

A lender can pick and chose who they want to lend money to and what levels of risk they are prepared to take.

Also, I don't know where you get the idea that spent criminal convictions "don't need to be declared"? In many, many circumstances, yes they do!

fiveyearplan

Mrcow, we are not necessarily talking about declaring to lenders but to things like contents insurance etc. How can a discharged bankrupt be more of a risk than anyone else?

peachyprice

prowla wrote: »

The point is that in becoming bankrupt, you have made a clear statement that you have severe issues with managing money.
Surely it is in the interests of potential lenders to know that?

For life, regardless of the circumstances of your bankruptcy?

And, that would be all well and good if it were only lenders who ask, what about insurance companies? What 'risk' do you percieve a person who was BR 10, 20, 30 years ago poses to an insurance company?

4$£&*(£$&*(!

mrcow wrote: »

Bankrupts are not treated "worse than criminals".

They are just treated as bad investment risks - which is exactly what they are.

If I was considering lending a large amount of money to someone, I certainly would want to know if they'd ever been bankrupt before.

As for some sort of rule about not having to declare it......if a lender makes a point of asking whether a potential client has been bankrupt in the past you'll have to answer anyway, rules or no rules. Anything less than that would be fraud.

A lender can pick and chose who they want to lend money to and what levels of risk they are prepared to take.

Also, I don't know where you get the idea that spent criminal convictions "don't need to be declared"? In many, many circumstances, yes they do!

I find much of this to be unfair and unfounded. For instance, the bankrupt I'm assisting right now is a far safer risk post bankruptcy than pre bankruptcy as they have put the brakes firmly on, been able to identify where problems happened, identify why they happened (and incidently the problems were caused by an unreputable employer's actions and were not recklessly incurred); then build up a firm layer of savings to ensure similar problems can never happen again.

In a position of finance, I would sooner invest in a person who can demonstrate a savings cushion than someone with a dozen credit cards running up reckless shopping bills but who has never been bankrupt.

I find your comment about rules being rules just bizarre. A lender cannot ask if you are gay or black for instance as this is illegal discrimination. They cannot make rules up as they go along. If legislation is passed saying they must not ask the question, then they must not ask the question!

In relation to spent convictions I didn't say all in every circumstance. You may wish to read the Rehabilitation of Offenders act 1974, but aside from this you've missed the point. Many offences that do not require a declaration are far worse than bankruptcy yet once they're spent in many cases that is the matter done and dusted.

Sadly I feel you are just here for an argument and are a reactionary, so I believe these words will fall on deaf ears. Bankrupts need guidance and can prove with their actions they are safe risks, they do not need people to judge and make carte blanche statements based on prejudice.

mrcow

fiveyearplan wrote: »

Mrcow, we are not necessarily talking about declaring to lenders but to things like contents insurance etc. How can a discharged bankrupt be more of a risk than anyone else?

What difference in premium does it cost usually?

I just tried a Morethan home insurance quote to investigate out of interest and they didn't even ask (niether was it under one of their "assumptions" that I'd not been).

4$£&*(£$&*(!

mrcow wrote: »

What difference in premium does it cost usually?

I just tried a Morethan home insurance quote to investigate out of interest and they didn't even ask (niether was it under one of their "assumptions" that I'd not been).

Some comparison sites ask this routinely, and companies such as Budget also ask the question. If the comparison website does not ask, it often appears in the final quote just ahead of purchase.

fiveyearplan

Some won't even insure a bankrupt. Way before I was even contemplating BR (incidentally which was all business related - I never went mad shopping on credit - sometimes I wish I had though!) we had a policy with More Than and when we had a fire in the house we made a claim and were asked if anyone in the household had ever been bankrupt - I thought that an odd question but of course just answered no. I wish I had asked what the outcome would have been had someone in the household been BR.

dvs

Money_Grabber13579 wrote: »

I doubt all the people who were owed money by now bankrupt people won't be very happy with this suggestion! What I feel would be a better option would be to give people more time to try and sort themselves out. (i.e. limit future borrowings and having a managed payment plan that matches their income, with options to defer payment if absolutely necessary) After all, if I was a creditor, I wouldn't be too happy if I had lost a lost of money through a bankrupt customer, knowing they could do the same thing all over again in a few years time.

There needs to some kind of warning to future lenders, but bankruptcy should be even more of a last resort than it is now.

I agree with what you say on some points but I think six years is long enough for future lenders to know about a bankruptcy. I found lenders were not helpful before bankruptcy. In fact many lenders needed me to miss a payment before they could help (and even then they weren't interested).

I agree with you when you say you wouldn't be happy if you had lost money to a bankrupt. I certainly wouldn't (and have done) but then I would also take some responsibility for lending money to them in the first place. My father taught me never to lend money, only to give. What you are prepared to give is less than what you would lend. If you get it back, then great. If you don't, well you never expected it back so nothing lost. I think banks need to take 'some' responsibility for irresponsible lending.

I doubt anyone who has been through a bankruptcy, would really want to do it again. I certainly wouldn't.