Why do THEY chase 'til you go bankrupt?

Bleddry

Can anyone enlighten me as to why these people chase for a debt, even when the individual concerned, has no assets - no home, no job, no savings - basically.. nothing? My situation has come about through my ex-partners business venture. So although I have personal debt, it is all business related; ie. no sports car, holidays, expensive jewellery etc to show for the loan, as it all went into supporting the business (LTD now liquidated). The bank has had the majority of the debt covered by DTI underwriting and a personal guarantor, but they are still out for more - except they've had it all. So why do they keep chasing? Do they get some kind of tax rebate/reward if they make you bankrupt?
I am obviously new to all this, although my situation has been going on for some while now, but would appreciate any experiences/comments.
Many thanks.

fiveyearplan

Hi and welcome Bleddry. How much debt do you have and how is it made up ie credit cards, loans etc. Also if they are business debts from ltd co, did you or your partner sign personal guarantees?

I'm sure the banks would be open to full and final settlements at a reduced rate. They will most likely NOT make you bankrupt especially if you have no assets. It costs them about £1,600 to make you bankrupt with no guarantee on a return.

Bleddry

Thanks for your response.
The debts are made up of a cc in my name and joint current and loan accounts - all with the same bank, who incidentally helped set up the business through their small business advisor dept. The monies were used to support the business. They total around £30k. I'm sure the banks would be open to a full and final settlement, (they've already had £150k+) but right now I would have to borrow the money just to go bankrupt - as a single mother of two now, I can not see a way of ever repaying. So my question is, why do they continue to chase, when there is nothing. How do they benefit from making someone bankrupt in these circumstances?

fiveyearplan

They chase and chase in the hope that you will cave in and pay or your circumstances will change and you can then pay them. It is very doubtful they would ever make you bankrupt although they do threaten it - it is 99% just a threat.

Have you spoken to any of the debt charities like CAB, National Debtline or CCCS? They will be able to let you know all your options. Bankruptcy does sound like a good option for you and it would be an end to any of the debt chasing.

Bleddry

Thanks again.
Yes, I spoke with the CAB last year, and they decided they could not help as the debt on the cc was used for the business, they classed my debt as commercial.
My circumstances are not likely to change for the foreseeable. Surely it costs the bank in terms of administration/letters/sols. fees etc - so why, when there really isn't any chance of payment (and they've already been covered for the majority) - do they persist? How long before they give up, because this must be costing them more than it's costing me?
Yes I am naive, but where is the logic in people paying to go bankrupt?
It seems a contradiction in terms.

Chloepad1

I think it is ludicrous that banks and credit card companies etc can push someone to the point where bankruptcy is the best option. In most cases, these creditors must know that they are never going to get anywhere by their frankly appalling bullying tactics. Keep your chin up my dear and remember there is always someone here to offer support and guidance. This board is wonderful in that you need never feel alone.

fiveyearplan

Bleddry wrote: »

Thanks again.
Yes, I spoke with the CAB last year, and they decided they could not help as the debt on the cc was used for the business, they classed my debt as commercial.
My circumstances are not likely to change for the foreseeable. Surely it costs the bank in terms of administration/letters/sols. fees etc - so why, when there really isn't any chance of payment (and they've already been covered for the majority) - do they persist? How long before they give up, because this must be costing them more than it's costing me?
Yes I am naive, but where is the logic in people paying to go bankrupt?
It seems a contradiction in terms.

Contact Business Debtline then.

philnicandamy

Links below.....

Feelingfoolish_3

Hiya, business debt line will only help if you are trading, contact National Debtline.

Creditors chase for happiness I feel, I think they get that warm feeling of horlicks when they get someone to cave in......

Trade creditors often bankrupt people for spite - so they have difficulty in obtaining credit to continue to trade.... Banks wont bankrupt you if you have no assets, its just a tic tac!

Bleddry

Thank you for your kind words and advice.
I was put on to the business d/l, and basically told to go bankrupt.
But I don't have the funds to go bankrupt, not without borrowing from family - and I don't want to borrow again from anyone. I'm unsure why the banks and the courts would want to encourage people in debt, to go further into debt, in order to go bankrupt - where is the sense in it all?
I too, have worked hard all my life - practically gave birth in the office!! But all to no avail. My ex had a well paid job prior to his new venture. The bank passed his bus. plan first time, and helped put in place funds etc. They even offered me the cc - only to call in the loans a few months later. I never do cc's, but took this offer, as I was expecting our second child at the time, and intended it to be a safety net. My error was agreeing to the sum being transf. to the business.
I think I would feel better about all this, if I at least had something to show for it, but not even a holiday to Bognor (no offence to Bognor!).

fiveyearplan

Feelingfoolish wrote: »

Hiya, business debt line will only help if you are trading, contact National Debtline.

They helped me and I had stopped trading - its worth a call.