At least 2 out of 3 people declared bankrupt are not home owners.

fc123

ninky wrote: »

thanks for a great post fc123. however, i know this is only anecdotal, but i remember seeing a documentary following some cases of people in debt a little while back and there was one woman who was going bankrupt who had giving several thousand pounds to her mother a year of two before. she was stressed because there was a suggestion this money might have to be returned and argued that it wasn't fair to put stress on her mother who couldn't afford to pay back the money (it wasn't clear whether she actually had the money or not). in the end it was decided she didn't have to pay back the money. what would happen for example if the person who had been 'gifted' the money just said they'd spent it? this would be very tricky to disprove especially if it was cash.

i'm beginning to wonder if i'm a mug. my OH had a large loan taken before i met him (some may remember this story) which i negotiated to have frozen and the interest and ppi paid back. he had no income or assets at the time so i made the new reduced payments. OH now covers them himself. i've been a bit of a dragon since then and banned him from loans and credit cards but quite frankly i'm wondering if we should have just lived on the easy credit to the max then he could go bankrupt - the house and assests are all mine - what's to lose? (apart from my own strong sense of right and wrong of course)

I don't think BR is an easy option as it's mighty inconvenient for the BR person.
Things like insurance etc are more difficult to obtain or more expensive.

On the whole, the amount of people who gear it up with the intention of going BR is very, very small likewise business fraud. It exists but it's not the norm. It's quite hard to hide large sums of cash too.

Gambling is treated differently too, usaully getting a restriction order.

lemonjelly

Thrugelmir wrote: »

The screws are being applied ever so slowly to ease credit out of the system. The "have it now outlook" will change as people find they can't. The contraction of credit is going to be a long drawn out process as any sudden moves will impact severely on the economy and would merely make the current situation worse. Abundant credit instantly available at cheap rates of interest is being consigned to the history books.

Not so sure about the have it now brigade undergoing a culture change to be honest. It has become seen as a right now, to have whatever you want as that want arises.

Just read a report about benefits which highlights that benefit fraud claims have increased, but instances of benefit fraud have disproportionately increased.

People will find another way to get the money IMO. I expect fraud (benefit & commercial) to increase along with other types of crime.

ninky_2

fc123 wrote: »

I don't think BR is an easy option as it's mighty inconvenient for the BR person.
Things like insurance etc are more difficult to obtain or more expensive.

.

you're assuming that they actually have any of these things. if you have no assests and no liabilities there is nothing to lose as far as i can see and thousands of pounds worth of spending power to gain. it just doesn't add up.

silvercar

You won't get the spending power again, at least not quickly and not easily.

If the OR suspects you've been on a spending spree prior to bankruptcy and been reckless you are likely to get a BRO or BRU lasting years.

ninky_2

silvercar wrote: »

You won't get the spending power again, at least not quickly and not easily.

If the OR suspects you've been on a spending spree prior to bankruptcy and been reckless you are likely to get a BRO or BRU lasting years.

but surely you've already enjoyed the spoils? not taking advantage the first time around because you might not get a chance a second time round is a bit like not buying a lottery ticket because you might not win twice in a row isn't it?

what's the problem with a BRO or BRU if you don't have anything in the first place? and who's to define what a 'spending spree' is? surely the nature of having debt means you've spent money in the time running up to the debt? is the odd foreign holiday, meals out, buying presents for your partner a 'spending spree' for example?

i'm being provocative because i really think the system is very flawed.

ninky_2

i think those who describe bankruptcy as difficult / inconvenient are talking as people who have had a certain standard of living and possibly from a background and circle of associates where this standard of life and expectations of employment level are the norm. if you have nothing and are on a no / lo wage (with no realistic prospect of much more) then really what is the disincentive to rack up the credit cards and loans and go BR?

silvercar

Current rules are that your bankruptcy would be finished after a year (or less) and you can then apply for credit, bank accounts etc. The bankruptcy would show on your credit record for 6 years.

If you get a BRO or BRU, the bankruptcy lasts for years and shows on your record for 6 years after the end of the BRO/ BRU.

So the walk in the park from the "got nothing, I'm untouchable" brigade becomes a pain in the @rse.

Its the Official Receiver who defines what a spending spree is. Generally taking credit you know you have no way of repaying, for anything that may be out side what is deemed normal living expenses would be frowned on.

ninky_2

silvercar wrote: »

Generally taking credit you know you have no way of repaying, for anything that may be out side what is deemed normal living expenses would be frowned on.

does this mean that anyone who is declared bankrupt but not suffered a change of circumstances gets this BRO / BRU put on them? i doubt it.

surely the burden of deciding affordability should also lie with the lenders?

and what exactly is 'outside normal living expenses'? these days many consider a car (not too old), meals out, holiday 'normal' - not to mention mobile phone, internet, etc etc.

also -does that mean it's okay to take credit you know you can't afford to pay back if it is for 'normal' living expenses?

silvercar

does this mean that anyone who is declared bankrupt but not suffered a change of circumstances gets this BRO / BRU put on them? i doubt it.

Generalising, but you get a BRU if the OR decides you have enough disposable income to pay back some money to your creditors. You get a BRO if the OR decides you are not being honest with them, have deliberately wasted money you knowingly couldn't pay or are a gambler.

surely the burden of deciding affordability should also lie with the lenders?

No, its the OR's decision. In fact, some people are forced to bankruptcy after a lender has rejected an IVA proposal.

does that mean it's okay to take credit you know you can't afford to pay back if it is for 'normal' living expenses?

Well if the !!!!!! hits the fan and you've no money to buy value bread from Tesco and have kids to feed, so you pay by CC, the answer is probably yes.

ninky_2

silvercar wrote: »

You get a BRO if the OR decides you are not being honest with them, have deliberately wasted money you knowingly couldn't pay or are a gambler.

is it just gambling addicts who are considered in this way or would say a drug addict or compulsive shopper get the same treatment?