Why does bankruptcy effect people differently?

capeverde

I personally went bankrupt in 2010 and was discharged a year later with no IPA. After reading these boards for some time, Im inquisitive as to how or why people are affected differently post Br. I read about how most struggle to even get the most basic bank accounts and how credit is pretty much unheard of for 5 years. Now assuming people have cleaned up their histories, which I did pretty much straight away, why would there be a difference.

For example, I was allowed to keep my natwest current account with debit card during the year of my bankruptcy. The OR was notified as was the bank and the former had no interest and the latter was happy to maintain it. On discharge I was allowed to open a Lloyds full current account with debit card and chq book as well as a savings account with them. I also opened a business account. My mobile contracts carried on running and I have also opened new contracts for my two kids . None of my insurers have an issue with paying premiums monthly. I was given a capital one credit card after two years and now also have a Lloyds one. Last week, I was able to set up a 15k overdraft on my business account as sole director with just my personal guarantee. That is under 3 years after discharge. The manager was also happy to provide contract hire on two new vehicles we are funding and provisionally offered us a mortgage although we only require a 20% LTV.

In a nutshell, bankruptcy has hardly affected me and yet others seem to suffer incredibly. Why is there a difference. Other than cleaning up your credit file, which I assume most do are there any other factors involved? For example I only had one creditor which was a bank, allbeit for quite a large sum. I also had a perfect credit history for many years previous and have never been late with a single payment right upto the time I declared myself bankrupt. Would this make a difference?

Can someone explain the nuts and bolts of this as Im somewhat at a loss and if there are things that can be done to make things easier, Im sure people would be interested.

capeverde

Bump

Surely there must be someone with experience with how banks, credit reference agencies work that can answer this question as the disparity seems incredible.

toomuch2

I would be really interested in this discussion.

I am looking at options and trying to understand how bankruptcy impacts after discharge and how that compares to an IVA. I am interested if (in practical terms) an IVA insolvency is "better" that a BR insolvency.

Bank accounts are significant, but what about car insurance, house insurance, new mobile phone contract changing energy suppliers etc etc.

Members' experience would be really useful

alastairq

Bank accounts are significant, but what about car insurance, house insurance, new mobile phone contract changing energy suppliers etc etc.

Members' experience would be really useful

A thorough 'search' of this forum will elicit all the information asked for.

However, a brief run-down:-

CAr Insurance? No real issues...sometimes a broker/insurer will get on their hi-horse over bankruptcy, but most don't care.

Issue whilst Undischarged concerns paying monthly...which is a credit agreement, and if the total premium exceeds £500, the insurer must be informed of the BR.

Once Discharged, only mention BR if specifically asked. Co-op insurance have zero issues with BR, past or present.

House insurance? This is a more difficult area, but insurers are becoming less stroppy...check the T&Cs before committing. Again, Co-op insurance are one of those who have no issues....there are others.

For the above, I suggest avoiding going through the big comparison sites...pick your bunch, & approach direct.

Many thread on here reference the above topics.

Power?

No issues regarding changing suppliers, especially once Discharged.

Cannot speak about mobile phone contracts, as I've never ever had one.

capeverde

Thats all very well and good Alastair, but it seems nobody can answer my question as to why people are treated differently. As far as I can see, the main thing to do post discharge is to clean up your credit file. Take for example when I opened my current account with Lloyds, I admit to entering under the assumption the best I would get was a basic account and yet when she processed my information into the computer she showed me the results page and it came up with around 6 different accounts I could have including a full current account with debit card and chq book. Therefore it wasn't a 'human' decision. Why can this be if others cant even get a basic account with the exception of barclays. Is it down to history prior to bankruptcy, as this is the only thing I can place it as. As I mentioned in my first post I didnt have one late payment on my account even at the point of bankruptcy and I only had one creditor which was a bank. Would this be making the difference?

toomuch2

alastairq wrote: »

A thorough 'search' of this forum will elicit all the information asked for.

I didn't mean to appear lazy. I have spend a lot of time searching this forum and others.

There were three reasons why I responded to this thread.

1/ There does seem to be a difference in the way people are treated. While I have read all about the Barclays account and the Co op account I have seen posts where some have kept basic accounts at other banks; some are given debit cards at Barclays, others have not. When the best shopping deals are online not having a debit card can be a significant challenge in an increasingly cashless world.

For example my kids' school insist that all school meals are paid for by a card which can only be topped up via a debit card online. I am sure there are other ways of doing it, but that would require an explanation to someone at the school. While I am not yet BR or IVA I am not sure that I want to explain to a gossipy school administrator why I can't pay online.

2/ Getting real life experiences and "hints and tips" from members would be incredibly useful.

3/ I still am trying to understand the relative impacts of an IVA vs BR once they have been completed. It maybe one of the deciding factors in the route I go.

alastairq

.........probably.

I dunno what I could apply for? I have no need for additional services over & above those I have on my present accounts.

I haven't made a recent conscious effort to clean up my credit files either...but I suppose I ought to?

I suspect treatment will much depend on the vetting procedures of different financial institutions? How much variation in 'criteria ' is there?

Since a BR will be present on one's credit records, so will most of the affected creditors be noted [as defaults?}. I say most, because, of the three CRAs I've used in the past, not every account was listed on all three.

Also, point-of-service decisions can be subject to errors & omissions on the part of the operators...hence why some folk obtain services & products, yet others don't?

Individual institutions' policies can change over time as well..MSE is good at spotting where corporate mistakes have been made, urging us all to take advantage before the door finally closes?

There can never be a full understanding of how individual institutions respond to an application, unless very complete information is also provided?

Something many will not want to get into on a public forum?

However, the most common reason I've noted, for variations in what services posters manage to obtain seems to be down to that individual oster's understanding of what they are doing, and how they go about it?

A 'classic', yet simple example of the above centres on whether a poster goes around applying for things, yet announcing at the same time they 'intend' to petition BR?

I've noted such actions [innocent enough to those perhaps not 'in-the-know?'] from posters applying for Co-op Cashminder accounts pre-BR petition? Where, Co-op have refused them?

Now, this may be down to an internal Co-op policy.....or, may simply be down to an individual customer advisor's interpretation of Co-op's existing rules?

Without being on the other end of the phone myself, I would not hazard a guess.

alastairq

toomuch2 wrote: »

I didn't mean to appear lazy. I have spend a lot of time searching this forum and others.

There were three reasons why I responded to this thread.

1/ There does seem to be a difference in the way people are treated. While I have read all about the Barclays account and the Co op account I have seen posts where some have kept basic accounts at other banks; some are given debit cards at Barclays, others have not. When the best shopping deals are online not having a debit card can be a significant challenge in an increasingly cashless world.

For example my kids' school insist that all school meals are paid for by a card which can only be topped up via a debit card online. I am sure there are other ways of doing it, but that would require an explanation to someone at the school. While I am not yet BR or IVA I am not sure that I want to explain to a gossipy school administrator why I can't pay online.

2/ Getting real life experiences and "hints and tips" from members would be incredibly useful.

3/ I still am trying to understand the relative impacts of an IVA vs BR once they have been completed. It maybe one of the deciding factors in the route I go.

I wasn't implying any laziness at all....merely directing to the chapter & verse information on here,a first port of call, which can eliminate advice read based on incomplete or inaccurate knowledge?


Often the differences in treatment areas a result of differences in approach. What we can do on here is to make posters aware of the options. Hence, if intent on acquiring a Barclays basic account in the run up to BR, knowing that one might have to ask for a debit card, otherwise one does not immediately receive one, is something one needs to know in advance...preparation, eh? Other factors that come into play are the bank's own rules for debit and cash card issues? [age, etc??}

When folk post that they haven't 'received' what they expected, often we don't know exactly what they asked for in the first place?

The issues you raise in #[1] have been raised years ago, often by what are now the 'old stagers' on this particular forum...over the years, policies and attitudes have changed..often in line with what we complain about? For example, Co-op's use of Visa Electron cards...and Tesco's unwillingness to accept them online? Both issues now long since 'sorted?'

Regarding the school?

Well, you don't have to 'explain' to anyone why you are not prepared to 'pay online' at all. Just mention the phrase 'online security' and that'll kill any argument stone dead [or, it would if I were in your shoes?}......however, I would point out that, if a debit card is needed, then acquisition of such ought to be sorted a long time before ever an Insolvency process is entered into.

A major problem I note on this forum is the propensity for those considering entering into BR to 'leave everything to the last possible moment'..or even, 'till it's too late?'

Getting one's ducks-in-a-row beforehand, is essential to aid survival of BR.


#[2]....? This forum is littered with hints, tips, advice, discoveries, etc.........or, just ask?

#[3] Aren't everybody's aspirations different? Experiences on here often begin with the responding to a question.....rather than, someone simply posting to say, 'this is what I did & found?'

If one has a future aim in mind, then, by asking the relevant question, others can [often via their own experiences], inform of pitfalls, etc, due to BR or IVA....

However, nothing is set in stone, ever.

What I couldn't do, you might be able to...further down the line?

However, regarding IVA vs BR, I would say this.....if the IVA fails, then BR is inevitable. How sure is one of what the future might hold? [Once, we were all encouraged to 'save for a rainy day?' We end up passing that rainy day saving on as inheritance, not having been able to enjoy the fruits ? ] An IVA lasts what? 5 years? Then what?

BR, on the other hand, does offer the opportunity for a truly fresh start.

If an IPA is agreed [and the amount, if any, can be argued over...try that in an IVA?].....then if the worst does come to pass, within the 3 years an IPA lasts..then one isn't at the mercy of a committee of unsympathetic souls if the amount needs altering, or wiping off altogether?

Of course, if property ownership is involved, that alone may dictate what course of action to take?

longtermplanner

toomuch2 wrote: »

Getting real life experiences and "hints and tips" from members would be incredibly useful.

The trouble with this is that you don't know how far what happened to someone else will be applicable to you.

Nor do you know what the general credit situation will be in 5-7-10 years time and that may have a lot more affect on the chance of you getting a mortgage than whether you went bankrupt or choose an IVA.

For example capeverde at the top says "The manager was also happy to provide contract hire on two new vehicles we are funding and provisionally offered us a mortgage although we only require a 20% LTV". If he had missed of the vital part about the really low LTV, you might read this and think "That sounds like good news". But as it is, is is pretty unlikely to be relevant to most people.

So certainly read all the stories here. It's worth spending many hours reading this and the IVA board looking at what has gone wrong and what has gone right for people. Some people like to dwell on the worst cases. Others don't mind accepting some risk of problems if on average a better result is achieved. If you have a partner, discuss this sort of thing with them.

wildheart83

People are affected in different ways by BR maybe because we don't all have the same creditors, and have different circumstances before, during and after BR.
For example, people might think that the BR is stopping them getting credit post discharge but it may be because of they're living arrangements, not on the electoral register, living in rented accommodation therefore moving more often etc.
Also maybe they previously had the more lenient companies as creditors included in their BR so the options are far more limited after BR.

Just my thoughts on this

alastairq

Just my thoughts on this

which are most welcome!