Are bankrupts getting a raw deal?

alastairq

It may be more socially acceptable in that it then does not take money away from schools and hospitals.

Are you suggesting that 'corporate' borrowers are exempted?

Because there's an awful lot of 'borrowing' going on with schools and hospitals.


What constitutes 'borrowing' ??

Buying an item on 'interest-free' credit over 4 years..or whatever, is the very same thing as using a credit card, or taking out a loan, is it not?

If there is a levy from the Govt. for 'using' credit, then this must affect most retail prices.

Since we have embraced, as a country, consumerism to the extreme, an extra levy on anything obtained via any kind of financial agreement, apart from 100% cash, will be affected.

This could even be essential items such as food.

We already pay VAT on virtually every item or service.

Sometimes we even pay VAT on something already subject to VAT...

Since, in order to keep our economy afloat, consumer spending is encouraged...and since many, many items could not be sold without some form of credit being involved, such a levy would be seen as counter-productive in boosting the economy.

alastairq

and whilst I'm still awake...surely, if a levy were placed upon all credit transactions..[which might include, of all things, TV licences??]....then SOA's of BR's will reflect this cost increase...thereby potentially removing more BR's from the IPA sector...

no surplus, no income for the BR estate?

debtinfo

Of course it is much easier to comment on others than propose an answer yourself

kepar

I think DI has a good idea about IPA's. Everyone gets one and it runs for three years. If your circumstances change during that time you either start paying or it may cease , if you lose your job etc. But you see too many on here dropping out of work, reducing hours or waiting until it is too late to impose one when they get a job. Now I am not implying that any of these are doing anything wrong , they are just playing the system.

But if it covered the whole 3 years and maybe the IS raised the bar a little to allow some surplus, I feel overall they would get extra money.

I feel after reading the suggestions so far this is the best, and that this could be the way forward.

alastairq

debtinfo wrote: »

Of course it is much easier to comment on others than propose an answer yourself

But that is what debate is about, eh?

In reality, any ideas put forward have drawbacks which are probably unpalatable to the law-makers/politicians.

As a small suggestion, perhaps HMRC should be discouraged from petitioning BR at the drop of a hat?

Perhaps they should be actively encouraged to negotiate more?

That may then ease the burden of expense from the IS somewhat?

{Have no idea what percentage of BRs per annum are down to HMRC, however]

debtinfo

That would not help the is though because they need more bankruptcies not less, either that or fewer bankruptcies that attract a higher fee. It also does not help hmrc, as if no one thought they were tough then they would go straight to theback of the queue of being paid costing them billions

debtinfo

Also I would add that whilst I know that hmrc can be aggressive I wouldnt say they make people bankrupt at the drop of a hat, in fact nearly all the cases I saw the payments were over due by at least 2 years

debt_doctor

debtinfo wrote: »

they need more bankruptcies not less,

'They' being the IS. Yes thats true. One of the main losses is that DROs have taken away a lot of bankruptcies. However, by altering the IPA regime the IS have made BR 'far less attractive' I have seen a marked resistance from clients to BR because of (in my opinion) the unacceptably harsh new rules.

I think the IS could well be the promoter of their own 'demise' in this respect; draconian allowances = fewer people going BR = less money for the IS = even more draconian allowances = even fewer bankruptcies.

I am probably processing a third of the bankruptcies that I did a year ago. I think that is part DROs and part unattractiveness of bankruptcy.

Bankrupts are entitled to a reasonable standard of living. Reasonable standards of living, coupled with the 'learning curve of BR' and the curtailment of further credit should equal a solvent future.

Bankruptcy is not a punishment. It is an essential part of the free market economy.


DD

debtinfo

I agree dd and I don't think that it is the best solution but it was the only thing they could do at short notice, I don't really think it will stay like this in the long run and that they will legislate some thing else in the long run. Hence why I was asking what people thought they could do instead. As you say dro's (which are a good thing) have been a big part of the problem but so have the increase in iva's andthe fall in thehousing market

debt_doctor

Do you think it is appropriate for someone in BR to only be allowed £10 per month for 'personal expenses' (as per the new rules) with no other flexibility when I can construct a DRO, IVA or a DMP for a single person and allow them up to £140 per month for going to pub?

DD