Not to create bad feeling, but why bother..

barnaby-bear

QueenB. wrote:

I believe in paying back what i owe, afterall i spent it and now i must pay it back. However i resent the charges added and high interest rates, banks want you to develope a debt so that they can increase their profits, and yes it is our responsibility to know that and not play their game.

I just got turned down for a credit card - credit file reveals problem is lack of searches - only have one CC issued at 18 in 1992 paid off in full every month.... ok so i only wanted to stooge but, I wasn't a cash cow.... I don't own any furniture we sit on t'floor but we have never spent a penny we haven't already owned. We know the conditions of credit - we can read so we sit on the floor saving until we can get the sofa I want. I feel empathy for those left with no choices to feed kids but most people spend debt on plastic cr^p and shoes and rubbish or 'home improvements' and should pay it back.

referree

Yes I agree, Lenders are just as bad in many cases for wreckless lending practice and they deserve to be accountable, but most of them base their lending on the information supplied by the applicant or the credit bureau.If a borrower does not volunteer the information and it is not on a credit file the lender has no way of knowing what has happened in the past.My point is if someone has already had several thousand pound written off via a bankruptcy fair enough, but no-one should be allowed to play the system routinely ,only to abuse it when they feel like it,it makes things far worse for the people who have genuinely got in a mess once in the past and have to pay hyped up rates to get credit for being a high risk when the reality is they may have had justifiable reasons for getting into bother in the first place. I see it all the time from both sides, some people who simply don't care about avoiding debts and the ones who really want to make a fresh start but can't because of the way credit scoring is weighted against them

But yes - pub discussion, if your mate didn't pay you back for a night out once you might let it go but if they made a habit of it you might start to get a bit cheesed off right and expect them to sort it out;)

ManAtHome

Personally, I think I'd do anything to pay off debts, but then I've never been in the position where I'd have to. Whilst I'm sure going bust (correct spelling..) is a "no brainer" for some people, I'm sure many many others have a lot of sleepless nights over it.

Although it wouldn't be for me (I think..), I can understand why some will go for the "fresh start" after 6 years rather than IVA for many more years.

But why is it just banks and consumers who get it in the neck - a large part of the problem is the media, constantly pushing the "easy way out" loans, business opportunities, posh&becks lifestyles, borrow heaps and make heaps propositions etc?

Penelope_Penguin

13000 wrote:

when it seems it would be easier to just go bankrupt. I've been reading a lot of stories on here about "how do I go bankrupt" and the like. (some not even knowing how to spell it properly) .....................
I'm not intending this as an argument, just I am sitting here wondering why I shouldn't just declare bankrupcy and have it over and done with in perhaps less than 18 months according to general discussion.

Why should I bother to pay my debts when it seems a lot of other people take the easy option (and I know its a minority that abuse it, but it still grates)

Pot and kettle regarding spelling :rotfl: :rotfl: :rotfl:

You're right that if you declare bankruptcy, usually you're discharged within 12 months. However, it's not plain sailing after that. You may still have higher interest rates, find it difficult to get credit, a mortgage, even utility and mobile phone contracts. You'll possibly find that you have to use a "sub-prime" lender.

Please don't believe that bankruptcy is an easy option. I work in this area, and people come to see me when they're reached rock bottom, often suffering depression, insomnia, anxiety on top of their finacial worries.

I'm not advocating bankruptcy as an "easy way out" of your responsibilities, but when people are unable to function (suffering health and employment issues, too) due to thier situation, isn't it better that they take this route, then get on with being a fully functioning member of society again?

Penny. x

Penelope_Penguin

ManAtHome wrote:

Personally, I think I'd do anything to pay off debts, but then I've never been in the position where I'd have to. Whilst I'm sure going bust (correct spelling..) is a "no brainer" for some people, I'm sure many many others have a lot of sleepless nights over it.

Although it wouldn't be for me (I think..), I can understand why some will go for the "fresh start" after 6 years rather than IVA for many more years.

But why is it just banks and consumers who get it in the neck - a large part of the problem is the media, constantly pushing the "easy way out" loans, business opportunities, posh&becks lifestyles, borrow heaps and make heaps propositions etc?

Hi, MatH! Are you suggesting that a bankruptcy lasts for 6 years and an IVA for much longer? Can you explain please?

Penny. x

seven-day-weekend

This is an information post that may be of use to someone; I am not making any judgement as to the morality or otherwise of going bankrupt.

A friend of mine is filing for bankruptcy. He and his wife (although separated) have a house on a mortgage. When I asked my friend what would happen to the house if he went bankrupt, he said that because there was only £5000 equity in it (due to repeated remortgaging to service debt), all that would happen is that when he went bankrupt his wife would have to pay him £2.5k (his share of the equity) and this would go to his creditors.

Therefore it is possible to go bankrupt and not lose your house.

dudleyboy

seven-day-weekend wrote:

A friend of mine is filing for bankruptcy. He and his wife (although separated) have a house on a mortgage. When I asked my friend what would happen to the house if he went bankrupt, he said that because there was only £5000 equity in it (due to repeated remortgaging to service debt), all that would happen is that when he went bankrupt his wife would have to pay him £2.5k (his share of the equity) and this would go to his creditors. Therefore it is possible to go bankrupt and not lose your house.

Morning, and... eh?? I just don't get that. Are you saying that because your friend has diminished all the equity in the property he needs only pay his creditors half of the remaining equity but not the house itself? How can that be? I don't understand....

Penelope_Penguin

dudleyboy wrote:

Morning, and... eh?? I just don't get that. Are you saying that because your friend has diminished all the equity in the property he needs only pay his creditors half of the remaining equity but not the house itself? How can that be? I don't understand....

Because.............when creditors are looking at a bankrupt, they look at what assets he or she has. The house is an asset, but it's mortgaged. This is a secured loan, so the mortgage company will have preference for any money raised from the sale of the property. The creditors will get what's left from the £5k equity, after selling costs, which will be diddley squat. Especially as if the property is a "distress sale", so would probably sell for considerably less than market value, leaving negative equity.

Penny. x

tyllwyd

From what the other poster said, if his wife is giving him £2.5, I suppose she is effectively buying him out of the house so he doesn't have any equity left in it. I guess he is not losing a roof over his head because she will continue to allow him to continue to live in the house, but financially he has lost it. I don't suppose there are that many couples where one partner goes bankrupt and the other one can afford to buy them out of the jointly owned house.

Biffa

Ok, here goes....

We went bankrupt in December last year and were discharged in July this year. At the time, we had just over £15k in debts, so not a large amount by any stretch of the imagination. Other people in court on the same day as us had anything up to £80k in debt. (As I remember, there were around 16 other people in court for bankruptcy on the same day as us).

We had no choice but to file for bankruptcy. OH is on Incapacity Benefit due to a) broken back and b) suffering ME. He also has chronic depression. He had been working up to June last year earning £22k, so going onto IB and getting £56 a week at the time was a massive dent in our finances. Because I was still working, we got no help with the rent or council tax, and were only getting £30 a month in WFTC.

We rent our home (from a friend), OR said I could keep my car as it wasn't worth more than £500 and had to be worth more than £1500 before they were interested in taking it (plus I need it to get to work). We had to have a basic bank account with no cheque book or overdraft facility, and even though we've now been dicharged we've kept the basic account as I don't WANT to have an overdraft or cheque book.

We weren't in a position to pay our debts off and the constant phonecalls and letters from creditors were making us both ill. We'd had a DMP with Payplan for a year before we went bankrupt, but in all honesty we were getting nowhere with it. Despite paying every month, creditors were still hitting us with late payment charges and interest, basically negating any payment we made. It wasn't an easy thing to do in terms of telling our family or finding the money to cover the court fees, and it will stay on our credit file for 6 years. We haven't had to pay anything to the OR as our income was insufficient, otherwise we could have been paying into it for 3 years. Yes, we've no got no debts, not lost our home or any of our possessions and it's been relatively easy for us, but if we wanted to get a mortgage now we would be paying a much higher interest rate.

Bankruptcy has given us the chance to make a fresh start and it's been well worth it. The stress factor has gone, we've managed to get a small amount of savings behind us (not a lot, but I'm not going to panic if the washing machine blows up) and we can afford for the kids to go on school trips.