MSE News: New Scottish bankruptcy law 'will cause misery', debt groups say

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  • alastairq
    alastairq Posts: 5,030 Forumite
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    Whats wrong with expecting bankrupts to pay towards what they owe? They ran it up. There are many reasons that people go bankrupt. But it is fair they pay back what they owe.

    Because, by following on from your misplaced logic, there would be no need for bankruptcy if the above were the case.

    The purpose of Bankruptcy is to allow creditors to be paid equitably, from the assets of the bankrupt.[after costs]...a situation that arises because , prior to the bankruptcy, that individual could no longer pay their debts as they fell due [insolvent].

    A once-and-for-all solution to insurmountable debt.

    The insolvent situation may arise from any number of circumstances.......and it is one of the OR's tasks to ascertain whether the individual deliberately placed themselves into an insolvent position...or not.

    The bankrupt isn't 'paying back'...merely contributing any surplus income over a fixed period of time, after 'reasonable living expenses' are deducted.

    Extending the IPA time limit can only lead to greater efforts to 'avoid' an IPA in the first place.

    And is counter productive to the ethos of the Insolvency Service, in that, one aim of bankruptcy is to permit the debtor to make a fresh start.

    Something those opposed to such moves will loudly proclaim.

    Such a view as proclaimed above indicates a moral simplicity which I find alarming.
    No, I don't think all other drivers are idiots......but some are determined to change my mind.......
  • Duke203
    Duke203 Posts: 113 Forumite
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    Like RBS...

    Not all creditors are as evil as RBS, or even other (evil) banks. Some might actually be "bread winners", suffering from "ill health", "redundancy", and even in the "gutter and homeless" at this time, AND then to kick them while they're down, they can't get all the money owed to them after that.

    http://www.bbc.co.uk/newsbeat/23158282
    "Chuck Norris can remain solvent for longer than the markets can remain irrational"
  • lazer
    lazer Posts: 3,402 Forumite
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    fermi wrote: »
    Last year 20.1% of bankrupts in England had Income Payment arrangements agreed. The standard/maximum terms of those agreements is 3 years. Payments go according to disposable income, so actual payments can vary across the term from £0 upwards, and in some cases agreements can be discharged if an adverse change is permanent. So a broad spectrum.


    That means there is almost 80% who pay nothing - to me this is not acceptable, there should at least be a taken payment for a minimum of 3 years.


    I agree that BR is a necessary process, and that many people find they have no alternative other than to go BR, however the fact remains that they did run up the debt so it shouldn't be an easy process to get out of paying that debt.


    BR is an emotive subject, some people know the reasons for it, and that its not an easy option, other people have seen family members lose their business because a client went BR and then the same client out driving a fancy car a year later.
    Weight loss challenge, lose 15lb in 6 weeks before Christmas.
  • jamesd
    jamesd Posts: 26,103 Forumite
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    edited 17 December 2013 at 1:00AM
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    lazer wrote: »
    That means there is almost 80% who pay nothing - to me this is not acceptable
    The 80% don't pay nothing. Most of the value of any assets they have would normally be taken as part of the bankruptcy to repay creditors, aside from the things needed for day to day living. Before even getting to the bankruptcy stage most will already have lost most of whatever they had accumulated.
  • alastairq
    alastairq Posts: 5,030 Forumite
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    BR is an emotive subject, some people know the reasons for it, and that its not an easy option, other people have seen family members lose their business because a client went BR and then the same client out driving a fancy car a year later.


    that last part simply promotes the Daily Mails attitude, yet lacks a knowledge and understanding of what Bankruptcy actually is, and means.

    What BR is not, is a punishment.

    Yet, that is exactly what such statements are meant to intend.

    Bankruptcy is solely the realm of the individual.

    Not those who happen to be around that individual at the time.

    That fancy car, means absolutely nothing.

    Those statements are much the same a saying all those on job seekers allowance are wastrels and should not receive benefits.

    And regarding the losses to others?

    How can debts be repaid, if there is nothing, and never will be anything, to repay them with?

    When trade is operated through credit, the future inability to re-pay is just one of hte hazards of such a system...and for most creditors, is factored into the deal.
    No, I don't think all other drivers are idiots......but some are determined to change my mind.......
  • rmelly
    rmelly Posts: 5 Forumite
    edited 17 December 2013 at 11:05AM
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    All I can say is sympathy is flowing towards those who go BR however what of the small businesses and individuals who suffer because of unpaid debts. It is not always big banks and institutions who end up out of pocket.

    (Text removed by MSE Forum Team)
  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
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    edited 17 December 2013 at 12:51PM
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    I find it interesting that the AIB have taken this approach rather than increase the initial fee - to bring it more in line with the fee for those in England and Wales.

    - David @ NDL.
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • JCS1
    JCS1 Posts: 5,294 Forumite
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    Surprised that the article by MSE is so badly worded, re the one year bankruptcy in England and Wales (but no mention of three year IPA).
  • longtermplanner
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    I think a lot of people misunderstand that even if you are discharged in a year or less, in England & Wales if an IPA is set it carries on for 3 years.

    The whole point of bankruptcy is a clean break with the past. You lose your assets but get a fresh start. I think 3 years is a good compromise between making people who can afford to pay something contribute and still preserving the principle of a fresh start.

    I don't know anything about the Scottish system, but I wonder if 4 years is brought in there if they will then try to extend it in England and Wales as well?
  • jennie65
    jennie65 Posts: 113 Forumite
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    At least in Scotland you get away with paying university fees and prescription charges while English citizens have to pay both of these things. Makes a refreshing change that its not the English getting financially screwed this time.
    Bankrupt 15/04/09 Discharged 28/10/09

    Debts £000:j
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