Cracking down on bankrupts?

NeverAgain_2

Bankrupts are now no longer allowed to keep surplus money and will be restricted to a spending allowance of just £10 a month.

So says this fairly long, but fairly well researched article:

http://www.guardian.co.uk/money/2011/mar/19/bankruptcy-life-after-debt

Has anyone been effected by the tighter restrictions?

Do you think they are reasonable?

debtinfo

from a debtors point of view they are dreadfull

from a creditors point of view they dont go nearly far enough

as an ex examiner, things change, they always have, they always will, things got better for debtors over the last 30 years, they will probably get tougher from now on

HateBanks

I have only been BR for 2 weeks and so know only of the new rules in detail, but I must say I feel the 'allowances' if we are allowed to call them that, as set by the IS are more than fair, when we were paying £150 minimum payment off a credit card to be able to do £80 worth of food shopping, we couldnt afford £900 a year for holidays and when we were getting bank charges at more than £300 per month we couldnt afford to pay our gas/elec/rent/phone as it would disappear straight from salary.

I think whilst as BR we should have a life and be allowed to live, we also should not be out living the 'life if riley' as it appears certain celebs do, giving normal hardworking BR folk (like those on here) a bad name.
Fair play if you were judged under the 'old' rules and get to keep anything under £100 excess and only give 70% of that over goes to OR, (or whatever the old rules were) but £20 a month is so much more than we had to call ours before BR so fairplay, its only for 3 years after all, to pay back the debt we had (had...that sounds bloody great!!!) at minimum payments was going to take us 70 years or so, so 3 little years is fine for IPA for me!

PS please ask me tomorrow after OR interview is I still feel the same:eek:

Worcsman

NeverAgain wrote: »

Bankrupts are now no longer allowed to keep surplus money and will be restricted to a spending allowance of just £10 a month.

So says this fairly long, but fairly well researched article:

http://www.guardian.co.uk/money/2011/mar/19/bankruptcy-life-after-debt

Has anyone been effected by the tighter restrictions?

Do you think they are reasonable?

Well the UK has been known for some time as a good place to go BR. For me at least it has been superb, I got out of my situation with no major dramas, other than renting a house. I was out of work during my BR, so had no IPA, then when discharged got a new job.
I think thats exactly how it should be, after BR, it will stick with me like herpes, never coming off my file, I will have to tell any financial institution that ever asks until I die, that I have previously been bankrupt so I reckon it's swings and round-abouts. But for me at least, the hassle has been worth it. I led a lifestyle I could no longer afford after several changes in my circumstances.

My own personal view is that part of going BR should be to properly prepare for it, you will be making a massive decision so should go the whole hog. Leave work until you are discharged. Benefits arent taken by the OR and no IPA will be made whilst you are on benefits. I kinda fell into that bit of it but knowing what I know now, if I needed to do BR again ever (I do hope I wont), I would engineer it so I was unemployed for bankruptcy.

http://www.thisismoney.co.uk/news/article.html?in_article_id=490161&in_page_id=2

debtinfo

Worcsman wrote: »

Well the UK has been known for some time as a good place to go BR. For me at least it has been superb, I got out of my situation with no major dramas, other than renting a house. I was out of work during my BR, so had no IPA, then when discharged got a new job.
I think thats exactly how it should be, after BR, it will stick with me like herpes, never coming off my file, I will have to tell any financial institution that ever asks until I die, that I have previously been bankrupt so I reckon it's swings and round-abouts. But for me at least, the hassle has been worth it. I led a lifestyle I could no longer afford after several changes in my circumstances.

My own personal view is that part of going BR should be to properly prepare for it, you will be making a massive decision so should go the whole hog. Leave work until you are discharged. Benefits arent taken by the OR and no IPA will be made whilst you are on benefits. I kinda fell into that bit of it but knowing what I know now, if I needed to do BR again ever (I do hope I wont), I would engineer it so I was unemployed for bankruptcy.

http://www.thisismoney.co.uk/news/article.html?in_article_id=490161&in_page_id=2

The problem with this is that the babnkrupcy finances is a closed loop, ie all the money to administrate the bankruptcy comes in one way or another from the bankrupt's, if many other people follow the same path as you, the IS will simply get the money in another way or from other bankrupts, for instance they could hold onto properties for longer, reduce the allowances in IPA's, put the bankruptcy fee up, reduce what stuff from your house you are allowed to keep etc etc

one way or another the money to pay for the bankruptcy system will come from bankrupt's

4$£&*(£$&*(!

I'd like to get others opinions on this to see if I'm being reasonable here, but I thought that story was written with a horrible slant and almost being from someone in an ivory tower. Am I alone in those thoughts? This article style has surprised me, particularly for one appearing in the Guardian of all papers.

fiveyearplan

I'll say it once again, I am so glad I went bankrupt when I did. Mind you, I had a negative surplus anyway! lol!

HateBanks

I thought it was written with a horrible slant too, but high profile 'celebs' (if you can call KK that?) give BR a bad name, as if it needs any help!
As it says she has declared BR and is still living in a "lavish £3m house in Surrey with an indoor pool, gym, spa and cinema, which costs £5,500 a month to rent." I would find that unacceptable if I didnt know more about the real BR situation.
Its a sad view that the public have and that is promoted by the media regarding bankruptcy.

Worcsman

debtinfo wrote: »

The problem with this is that the babnkrupcy finances is a closed loop, ie all the money to administrate the bankruptcy comes in one way or another from the bankrupt's, if many other people follow the same path as you, the IS will simply get the money in another way or from other bankrupts, for instance they could hold onto properties for longer, reduce the allowances in IPA's, put the bankruptcy fee up, reduce what stuff from your house you are allowed to keep etc etc

one way or another the money to pay for the bankruptcy system will come from bankrupt's

Well I guess that's a reasonable slant on what I did, I don't think though that other, future bankrupts will pay more. Ultimately I think, like anything else, you have to understand the sytem in order to make the decisions that will make the most sense for numero uno.

Ineedaname

debtinfo wrote: »

yes but there is a cost, they have to pay their agent moonbeever to collect the payments so if you are collecting £10pm but it costs you £15pm to collect it then they would be losing money

I appreciate that and it's not my gripe. I'm concerned that not every BR ends up being treated equally because if you have £19 surplus you get to keep that, so are £19 a month better off than someone who has £21 surplus and has to give ALL of it up.

I know that would be the case wherever the cut off was as it's not economical to collect just £1 over any surplus limit. But it does put those with more surplus in a worse situation than those with less.

I guess it makes a change that less is more financially. :rotfl:

roougers

I'm not massively up on the laws daaan saaaaf, but I am concerned that a Tory Govt that has cosied up to the Banking industry is going to come down hard on BR's. In fact I know of a couple of guys from Nottingham who own a DRA who have given generously to Tory coffers.