Jumping straight to bankrupcy

nomoneytoday

IMHO the "proper" way to sort unmanagable debt is to

1 - speak to creditors, hopefully freeze interest, and restructure to something affordable

2 - IVA / DMP

3 - bankrupcy

Now a friend of mine owes £34500 and wants to jump straight to bankrupcy as "that way I don't have to pay anything back"

Doesn't seem right to me.
Apart from the negative effect on credit records, is what he says correct?

He lives in a rented flat, and has no 'major' assets.

Edited to say Thanks in advance,

Mercuryrising

Will affect employment in certain areas - including many financial professions. Although that may not be a problem for him, but will close down doors open to him in the future.

Sadly, I know of many people who have been bankrupt and seem to enjoy playing the system and not take responsibility by going down the DMP or IVA routes.

nomoneytoday

Seems like "playing the system" absolves some people of their responsibilities to at least pay back something of their debts.

If you go to court does the judge not make the defendant at least attempt an IVA first?

earwig

hi my oh is bankrupt at the advice of the cccs we did not have enough money for iva and under dmp he would have to live to the age of 145 to pay it of when you are bankrupt you do not get of scott free you have to pay a percentage of any surplus earning for up to three years any money you inherit gose to the o/r or any other extra money you get you have to inform the o/r i know what you are saying about some people just wanting to get out of paying there debt but we are not all like that and belive me bankrupcty is not the easy opption and infact there is not much differance between iva and bankrupcty if you dont want to muck up your credit rating then dont go bankrupt have an iva or go on dmp they all muck up your credit rating we wanted to pay our debt of but the cccs said that the only way we could do this is under a dmp and the creditors would never accept the dmp as the debt was to high are our repayments were to low

sarah0404

As far as I'm aware, you can't just decide to go bankrupt. It goes to court and a judge decides if you can declare yourself bankrupt. I know some people seem to think it is the easy option, that they can just walk away from their debts. But that isn't true. You still have to pay some of them back. There are debts that you are not allowed to go bankrupt on. Student loans I think? You still have to pay them back. If you have a house or car over a certain value the court can order that they are sold to pay off your debts. Your friend might also want to to check his tennancy agreement. In ours we are not allowed to go bankrupt. We get turfed out if we do.

It annoys me when people think it is an easy way out. Of course some people DO need to declare themselves bankrupt. My friend also tried to declare herself bankrupt when she could have easily paid her debts off. I have debts of £32,000. We are a family of 5 on an income of £15,000 a year. We will be debt free by December 2009. It can be done!

nomoneytoday

Thanks for your words

Walnut_whipp

Its not people running from their problems and jumping ship!!! I can not do an IVA or a DMP I do not have any and I mean any spare money... if i did i would do an IVA. I rang the cccs who advised me the only way forward is a bankruptsy!!!

If I had any money i would happily pay back what I owe... I made the debt and I should pay it back!!! unfortunatly in my present situation I can not pay back what I owe them!!!

I resent people who assume that because I am going to go bankrupt I have taken no responsibility for my debts!!!

In_Search_Of_Me

Walnut I dont think people were saying you...SOME people (ie not all people) do almost give the impression that they dont give a stuff about going bankrupt & for some there are few consequences (ie now owning property or anything of value etc) while others are genuinely devastated & have tried to pay things off but have had to go bankrupt. I guess its the same argument that can be applied to able people using the benefits system for years when they could work, they just dont want to? For others the thought of not working/paying debts is horrendous & I think we have to accept that people are different & that we wont always agree with them; also guess we dont know what is going on inside their heads!!

Addicted2Chocolate

for bankruptcy those who have surplus income will have to pay part of it (50% to 70%) under an ipa for 3 years.
at a bankruptcy hearing a judge may make an interim order and ask a insolvency practitioner to submit report on viability of an iva.

THE_LONE_RANGER_4

bankrupt is not an easy option but i think in many case the only solution i paid my debts 19k off but if your on benefits or very low income its just ridiculuse go bankrupt and move on and dont do it again

Kevicho

nomoneytoday wrote:

3 - bankrupcy

Now a friend of mine owes £34500 and wants to jump straight to bankrupcy as "that way I don't have to pay anything back"

The problem with that philosophy is that the pattern will most likely repeat itself and in 10 years time (or less) he may find himself in the same situation again.