Dad wants to go bankrupt.

moxter

I can't help with what to suggest.

One thing does leap out at me though. The fact that you're wondering whether to sacrifice yourself for him suggests a very strong family bond.

You might need to make some difficult decisions. There may be some rocky moments ahead. Just make sure you keep reminding yourself that you love your dad, and make sure he knows as well.

Money can't buy that.

adindas

As the OP said dad has no house, and no assets apart from the car. If all of the prescriptive method suggested by member here are not acceptable to dad. I think the dad intention of going bankrupt is a clever way of dealing in his situation. So first sell the car and max out of it and then declare bankrupt.

The law still allow people to do this "legally". If you have not got enough asset what you have got to loose.

Why worry. Worry about never be able to get credit in the future ? Well, what is the problem with that. A lot of people on low income never have debt in their whole life. Also the people who close to their retirement age will benefit as they will not be having enough income to pay back.

While there is sometimes a genuine reason for going bankrupt; Corruptors, criminals have been exploiting this loophole for ages. The difference here is that they are doing this in hideous and illegal way hiding their assets in another country.

RuthnJasper

alastairq wrote: »

DAd must deal with it himself?

Without let or hindrance from anybody else?

Bankruptcy, especially, really is taking a debt situation by the horns....allowing creditors to be dealt with equitably..............................

Also, thus far, I haven't noted any posted evidence Dad has actually asked for money from any of his family?

[The OP was asking whether he ought to offer his Dad some money...not the other way around?]

No-one seems to have picked up the part of Paul's post which states that his father has ALREADY gone through bankruptcy once, @12 years ago. It doesn't bode well for him.

Paul, I am so sorry for your situation, but I completely agree with you on your decision to to give your dad any money.

Maybe you could buy your mum a simple, inexpensive gift now and then (some of her favourite perfume; a little bunch of flowers; etc.), to try and keep her spirits up. I don't know what to suggest about your father - I'm not sure if he'd be willing to listen to reason? If so, the people at http://www.stepchange.org/ are incredibly helpful (and free to use).

I sincerely wish you all the very best. x

alastairq

RuthnJasper wrote: »

No-one seems to have picked up the part of Paul's post which states that his father has ALREADY gone through bankruptcy once, @12 years ago. It doesn't bode well for him.
I sincerely wish you all the very best. x

Don't want to be picky, but....below is the relevant part of the OP's original post, note, no BAnkruptcy, just wonderment as to why that route wasn't taken?

He has done this in the past, about 12 years ago, but that time he had more than one credit card, and go into debts of 70k plus. He had to sell the house to pay these debts off, not sure why he did not go bankrupt that time as it was far worse.

I agree with what has been said, regarding lending money to Dad...

margaretclare

I applaud the OP for having developed a different attitude to money than that of his Dad. Seen it, don't want it, want a different way of living. I sympathise and feel sorry for Mum. It sounds as if Dad will not listen to anybody - the OP says 'he shouts' and has not learned from dire experiences in earlier years. Possibly he never will learn, not unless he wants to, and no one can make him or influence him.

OP, do not offer your Dad your savings. It's a kind thought but it will be useless. They'll just get swallowed up in the mire of his debt, you'll see nothing in return and they will - in the long-term - do nothing for him at all.

You sound like a very sensible lad who has his head screwed on the right way. Well done. Keep going the way you are.

RuthnJasper

alastairq wrote: »

Don't want to be picky, but....below is the relevant part of the OP's original post, note, no BAnkruptcy, just wonderment as to why that route wasn't taken?



I agree with what has been said, regarding lending money to Dad...

Oops; silly me!

alastairq

Once more, I hesitate to criticise Dad for his attitude,, which manifests itself in his behaviour.

He is in a place too many of us have been in the past......crushed under the burden of debt, trying to keep up appearances [influenced as much by his past, and environment, as anything else]....deep down, wishing the world would stop, even for a moment, and let him catch up........?

He has tried to sort the debt situation before, by selling the property.

Sometimes this works, often it doesn't.

One of the biggest problems with accumulated debt is [in my view]....the feeling that the amount known to be owed really doesn't equate to the value we have received.

This is down to the interest, and charges systems employed by creditors...all of which magnify the original amount owed, beyond all proportion.

3 grand borrowed, very quickly becomes 10 grand owed.

Very soon, our incomes are pretty much entirely swallowed up simply servicing these debts.

So, in order simply to 'live', more credit is used.

I once likened my family economics to Rover.....no longer a case of 'income' & 'expense'....but one of 'cash-flow.....?

The banks and CC's basically wanted, and got, my entire income.

I became an intrinsic part of the system.

All of which is fine...as long as nothing untoward happens.

What I ignored [and was encouraged to do so, by the very creditors I 'owed']...was the fact that, like millions of others in the same boat, I was, in fact, insolvent [like Rove?]

I note, none of my creditors referred to the situation as a 'debt'.....all referred to it as, my account..

We can very quickly acquire inertia. We tolerate the situation because society encourages us to do so...we are made to feel,, the situation is 'normal'....

We hide our heads in the sand.....yet, the stress of coping with the situation does not go away.

Yes, Dad needs to be a stronger person.

Yes, he needs to recognise & confront the situation he is in.

But, he isn't, & he [as yet] doesn't.......or , maybe he does, in a way?

So my dad says he wants to go bankrupt.

Well, let him!

Support him through what will be a difficult time?

Don't fall into the trap of being judgemental.

DavidP24

I am considering Bankruptcy myself and so maybe I can give you a bit of advise from your Dad's perspective.

I used to earn a six figure salary, the credit card companies kept throwing cards at me, but I resisted as I hate credit.

Then the inevitable happened, had 2 surgeries, was thrown on the scrapheap. I was not worried at the time, I did not even sign on for any benefits as I hated the idea of that too.

In the past I had always been able to get contracts for £500+ a day, but my last role was a bit of a cul de sac. At the same time the job market shut down, a site where there were previously 400+ jobs in my sector had just 12 and none of them would take me because they felt I was over qualified.

So I set about retraining, I had allowed some of my certifications to expire and wanted to make sure that I had no negatives for an employer. I got the highest level of certification and scored 82% in that. I applied for hundreds of contracts, I created different CV's for different job types, but nothing seemed to be working.

I started networking with old colleagues and in my spare time took on an unpaid role which I would be paid £800k if it came off but nothing if not. We got the offer but the planners delayed it and it went into limbo. Not only did I get nothing but it cost me money.

By now I was running very low on money, I felt certain things would pick up, I continued to train myself in the field I was in previously. I also started to use the single credit card that had a credit limit of £5k. Within a month or two the offers of more credit flew in, I was close to my limit so tarted the balance to a zero rate card.

Things did not pick up and so I started using the original £5k facility except they had increased the credit limit to 10k. Now these sound like big numbers but not huge when you think what I could earn.

Well this continued, I was using one card to fund another, still I declined to claim benefits. As my limit ran out or the interest free period ran out I tarted both balances to a another zero rate card. So I had 15k at zero percent and sure enough, true to form the company I transferred from increased my limit (they should have closed the account as a credit check would show I still had debt).

So I decided to try and start my own business, the recession made this very hard, I did not take on any major overheads but still it cost me. Most companies fail due to being underfunded.

Well the same thing happened and by now it seemed normal, I tarted the balance, the old limits increased and I created cashflow.

All of this happened because I went into a survival mode, I have "provider" instincts and this included staying in the same area just long enough to get my youngest into a good school. I felt I would be failing them and my wife if I gave up so I kept on trying.

Finally I conceded and started to claim benefits, they would not pay the full rent as they said we did not need 4 bedrooms.

Pretty soon the pressures of this meant my wife lost faith, her friends told her that the state will give her a home and she would be financially better off without me. So she stopped paying the rent, she did not realise that she would be making herself homeless so there would be no Council house, still she got all kinds of support and was able to rent a house. With Court and legal costs the rent arrears amounted to £12k.

I was made homeless and the !!!!! hit her proverbial fan, I was able to freeze all interest and come to arrangements with the companies to pay £5 a month.

It took a while for me to find a landlord to rent me a home (with a bad credit record I had no chance using agencies an could not afford their rip off fees anyway.

A member of my family helped me get the deposit and rent together and I started over, but still I have this overfacing debt.

I claimed JSA and Housing Benefit, then I joined the Enterprise scheme to start a new business working from home. It has taken 2 years to get that business to a stage where it almost pays me my basic living expenses, I do not heat or have hot water. I eat from the beggars aisle at Tesco and I do not spend money on fancy mobile phones, a TV or even new clothes.

Still I have all that debt, it has been sold off several times back and forth, I have seen the fake letters similar to those that Wonga used (I never got payday loans) by various agencies.

I keep these companies at arms length and I have always told them that is any one of them pushes their claim legally then all I can do is go Bankrupt. The truth is I would probably take my own life as the shame of that would probably be the last straw.

All I have ever tried to do is provide for my family and give them a reasonable life. Even now they are the only thing that keeps me going, I have nothing else in my life, I can't afford it and I do not deserve it. A friend told me to go Internet Dating, he said it would make me happier, I laughed as I could not even afford a round of drinks, never mind a meal. I noticed how many profiles said they wanted solvent men and even if they do not mention it, it is the biggest factor in the decision making process.

I have made mistakes but the truth is you are on your own. Women go into their own "survival" mode, they are quite happy to run up the debt, not to cut back, not to contribute a fair share to household expenses based on their income and of course the state pays them to abandon their families regardless of the damage to the kids.

Then the state had to fund two households as a result of this, a lot of people do not have my self control or sense of responsibility to clean up my own mess. They think they are entitled and this is the problem with benefits, once you are on them it is a huge jump to get off and you lose 85% of any net income you get.

So what advice to I have for you Paul?

DO NOT GIVE OR LEND YOUR £12K TO YOUR DAD

The companies that lent him the money are all insured, they sell this debt off at less than 5p in the pound.

Just like me, he is 100% responsible for the financial decisions he made. Those companies will send all kinds of scary letters, they will use devious tactics but in the end, if you have no assets they can't take what you do not have.

I gather that Bankruptcy costs around £700, it will be uncomfortable but he will probably be discharged within a year.

The decision to go bankrupt has to be based on a realistic expectation to pay, he should make a budget and work out whether he can service the debt based on his income.

The option of Bankruptcy does not give him the right to continue increasing his debt to credit card companies without expecting to pay it back.

In my situation I would like to pay back every penny I owe to the people I owe to. Ironically, whilst the credit card companies have frozen everything it is lawyers who have added interest daily turning a £3.5k debt to a £7k debt into a £10k debt. They are the ones pushing it and they are the reason I am considering bankruptcy.

I am sure you can learn from your Dad's mistakes, if he has an ounce of pride he will not take your money and would rather see you use it to get your own footing on the property ladder.

You will not be lending him the money, you will be GIVING it to his creditors who can afford to do without it. The whole reason these companies lend money people cannot afford to pay back is because they are insured and can sell it off. Those insurance companies then use the debt collectors.

Your Dad should advise all of his creditors that he can no longer afford to service the debt, he should try to come to an arrangement where credit is withdrawn and interest is frozen, he should then pay off what he can afford each month. He needs to stick to that. He should also cut his costs, no Sky TV, he has to cut everything to the bone.

Every cost should be examined and reduced.. For example I need the internet for my business and of course a phone line, I pay £1.75 a month for broadband, £9 a month for line rental. I get free international calls 24/7. I have 5 lines coming in that cost me around £1 a month plus 5p a minute.

I dumped my fridge because it was costing 3x what a second hand more energy efficient one does. I measured power consumption of every device in my home. Heating hot water overnight on eco7 costs £300 to £400 a year, so I don’t do it. I boil a kettle for what I need.

I could give lessons on cutting your costs, but for your Dad he has to change his mentality, he needs to move from a provider to a survival mentality.

He already accepts he can’t cope, but that does not mean it is their fault. He has to cut back and they have to freeze everything so he can pay it back.

Don't do it Paul.

margaretclare

I had very great sympathy and understanding of the previous writer, until I came to this:

Women go into their own "survival" mode, they are quite happy to run up the debt, not to cut back, not to contribute a fair share to household expenses based on their income and of course the state pays them to abandon their families regardless of the damage to the kids.

David, you have found this to be true and I can understand your bitterness, but it is unfair to ascribe this to all women.

My first husband was quite simply, not good at all dealing with money. For this I blame his mother and the school she sent him to, which had aspirations of being a minor public school and the ethos was 'a gentleman doesn't talk about money'. He'd have been happy as an 18th century country gentleman, without the need to earn a living or budget at all. Budget - what's that? My early attempts to budget, in the first days of our marriage, led to MIL accusing me in front of him of 'marrying him for his money'.

We split within weeks, mainly because I couldn't stand living with MIL and her criticisms, and I took on a new career. We got back together a couple of years later when I was a 2nd-year student nurse. My career kept us going through all the years of his ill-health, the last 20 years of his life.

Not to cut back? I developed a talent for - as I wrote in page 1 of this thread - screwing everything down to the bare minimum and cutting back on everything, at times that it mattered. I was able to get a mortgage when he wasn't.

Don't make wild generalisations based on your own bitter experiences.

Nevertheless, I agree with you about the OP not giving/offering Dad his savings.