Are bankrupts getting a raw deal?

lala9

This is a new one on me, £10 per month for personal expenses? Where does this slot in on your SOA? A ridiculous amount.

debtinfo

Do you think it is appropriate to help someone who is insolvent build 140 pounds of pub money into their budget in preference to paying for their bankruptcy or creditors

debt_doctor

Do you know that such action is approved by the British Banking Association?

DD

debt_doctor

.................... OH, and the Insolvency Service !!!

DD

debtinfo

So let's recap the last few posts when the Is say you can have an allowance you hide behind it and say well they said we can have it, but when they decide that you can't it is a complete travesty. What is the end game here, how would you like to see it end, where no one ever pays anything back

alastairq

Maybe there is a higher political motive in making BR so unattractive as an option fro dealing with debt?

Given the lobby at the finance industry's disposal, perhaps the IS policy has some political leanings on it.....?

After all, less BR means people being compelled to find some sort of means of maintaining a repayment cash flow?

debt_doctor

debtinfo wrote: »

So let's recap the last few posts when the Is say you can have an allowance you hide behind it and say well they said we can have it, but when they decide that you can't it is a complete travesty. What is the end game here, how would you like to see it end, where no one ever pays anything back

Paying back, as an adviser, is not on my radar.

I think contributing towards ones insolvency should be based upon a real genuine ability to pay. I think the Common Financial Statement (CFS) does just that.

I find that most who are insolvent are victims of circumstance - something happened in their lives that either drastically or over a period of say up to 2 years affected their ability to keep their head above water financially. These same people had the ability to borrow huge sums because they held a superb credit rating, in some cases for 20 years or more.
Superb credit rating means that they always paid on time, the creditors by their requirement to seach the CRAs to make sure they wernt becoming over indebted were happy to continue to lend money.
The lending industry is very lucrative, and huge amounts of money have been made from those people prior to their BR in interest payments, arrangement fees, etc and then when they can no longer pay because those same people of 20 years excellent standing are suddenly in a hole because they have been made redundant, become seriously ill, had a relationship breakdown those people are subject to abuse from their previous finacial buddies who ring 10 times a day, write a threatening red letter every other day and continue to make money from their excessive charges for late payment fee, fee for a letter, fee for thinking about making a fee.
Then, when finally this person of excellent standing has to enter insolvency to protect their very sanity, the creditors bleat how unfair it is!

As I said earlier, huge profits are to be made - and sometimes they get their fingers burnt - well tough!

It wont be long before all our banks are making huge profits again - and thats fine by me - thats what they are in business for, but im not prepared to listen to their bleating about how hard done by they are.
Even when insolvency happens they either get some return (but to be fair, mostly not) or they apportion the amount owing as unrecoverable and a writing down allowance against their tax bill - so they never ever lose.

Only when the banks get so excessively greedy and they lend to absolutely anybody, and rob folk with useless PPI, and get found out do they incur such a huge amount of bad debt that it affects their functionallity.
Who comes to the rescue when the banks are insolvent? - We do! - and yet I never got the chance to send them one threatening letter - how unfair is that?

So back to the CFS. The CFS is a financial statement approved by the British Banking Association, the Financial Leasing Authority and the Money Advice Trust. Basically what it does is allows all essential expenditure (gas, elec, c/tax etc) and four categories of discressionary expenditure in Telephone, housekeeping, travel and other.
Other is the category I said a single person could potentially have up to £140 pm for going to pub. Some of the sub categories of 'other' are as follows;
78. cable, satellite and internet
81. pocket money and school trips
82. lottery and pools
83. hobbies, liesure, sport including pub, outings gym etc
84. gifts, birthdays and charitable donations.
There are several others. It is agreed by the afore mentioned bodies that the creditor never sees the breakdown (they just see an amount for 'other') and that they agree that providing that expenditure does not exceed the appropriate level then it will be accepted.
The CFS is the method of compliance in all protocol compliant (as required by the OFT) IVAs, DMPs and the IS has incorporated the CFS in to DROs as the ONLY acceptable method of calculating the less than £50 pm surplus requirement.
The future for the CFS is that it is going to be incorporated in to the County Court System to decide what is reasonable to pay towards an installment order of CCJ.
So, in summary - do I care about the creditors?- No.
Do I think people should contribute to their creditors in Insolvency? Yes, but with realistic allowances as per the CFS.
Back to the thread title - Do I think BR s are getting a raw deal? - Yes I do. I think the IS have made a ridiculous move that will do nothing but cause them to self harm. They are out of step with the entire financial industry, and incredibly, out of step with themselves in their attitude to ability to pay in DROs.
DD

dojoman

Whilst I can offer no suggestions to the funding of the IS, all I can say (and I maybe in the minority) is that going BR has helped me to start my life again. And I personally do not feel that bankrupts are getting a raw deal, my IPA only lasts for 36 months, then I am totally free of any obligation to any party and can freely spend my money how I want to. If I have to make sacrifices in that time then so be it, compared to other countries I feel that we are being treated fairly and I have no complaints at all:)

alastairq

And I personally do not feel that bankrupts are getting a raw deal

so, dojo...you have no objection to the continued discrimination displayed against those who are, or were, BR?

I also take it your BR was governed [as did mine] under the 'old' rules of SOA?

But, place yourself in present-day shoes?

How would you have felt if, perhaps, you had delayed the petition, by a mere 4 weeks, for example, placing your BR under the new regime?

I know I have no personal comparison to make.....seeing as my SOA left a surplus which fell under today's standards...never mind those of several years ago, but...all the same...imagine?

All I can say to DD is........phew!

And I'm glad to see someone involved in the 'industry' stating things I have long agreed with, railled against, even used as evidence to torpedo trolls with..

dojoman

Yes Alistair I went BR under the old rules, and like I said I maybe in a minority, but I still don`t feel that bankrupts are getting a raw deal. This is my view, and it is something I feel strongly about and no amount of discussion/debate will change my mind.