Is my friend completely mad or is this the 'done' thing.?

Karen1980

My friend is a single mum with 2 children and on benefits, she rents privately .
She took out a loan in july 07 for 12000 from lloyds tsb ( which i said was a bad idea) she consolidated everything then she started on the CC she had cleared ... now she has 6000 on CC and the rest of the loan owing.

Plus a massive overdraft , she cant afford to pay as any benefits she gets goes into the over draft. Shes in a mess and i want to help her so thought i would ask here.

Shes got another CC with £5000 avalible she says shes going to get all the cash then go bankrupt and live on this money ? Is this what people do? The way she see's it is that if shes going to BR then shes going to get every bit of credit used up then do it???

Will she not get in trouble for this? Wont they ask what shes done with it all? Help please before she ends up in even bigger crap then she already is.

Eshka_2

Oh my word.

It sounds to me like your friend hasn't quite realised what the real deal is here - she hasn't had her true 'lightbulb moment' as they say on here.

Unfortunately as I'm a newbie I can't offer any experienced/constructive advice on this problem - but I assure you someone will. All I can suggest is that you try to sit your friend down and talk this through with her, making her aware of the implications of bankruptcy and bringing to light (in a gentle way) the consequences of her actions.

She needs to seek some help immediately, you'll find that the most frequently recommended sources here are the CAB and CCCS. They *can* and *will* help. Perhaps her living situation re being on benefits is causing her to further bury her head in the sand? I can identify with feeling there simply is no way out when your only income is from the government - but there is.

Good luck, I'll be interested to see how this goes on.

duchy

Well going bankrupt will stop her doing it again as she won't be able to get any credit whatsoever-not even a debit card. Renting will be really hard too.
Any money she has will be considered part of her assets at the hearing -and she'll be expected to account for loans etc so frankly she's been a bit naive if she thinks she'll keep hold of that cc money. The courts have seen it all before and know the dodges.
Is she mad-no-is she taking a huge risk and maybe even the possibility of been convicted for fraud-yes. That cash on the card is going to stand out like a sore thumb-it isn't rocket science. There are always people who think they are cleverer than the system-our jails are full of them !
Ultlimately though she's an adult-you can point out the risk she is taking-that she could even lose her kids if she is jailed for fraud (the courts take a very dim view of people trying to take the pee out of them) but at the end of the day if she's determined to do it she'll do it-and reap the consequences. Sadly so will her kids.
If you think she's doing this because she's suffering from depression (we all do crazy things when suffering) then try and get her to get some help but you honestly can't stop her if she's dertermined-just point out the pitfalls. She's lucky to have a friend who cares enough to come and ask for advice though. I hope she appreciates you.

maninthestreet

Give someone enough rope, and eventually they'll hang themselves.

In_Search_Of_Me

wow...does she realise that she is about to commit fraud on several leves - knowingly using cards when you cant pay them & somehow trying to hide the money before going bankrupt...its a very risky thing to do & could have serious consequences. All you can do is advise her against it but from the sound of it unsure if she would listen? Sounds like she is in definate need of a lighbulb moment!! Some people do do this but it usually comes back to bite them as they rarely consider the full impact until its too late. I hope she comes to her sences before that happens. At the end of the day you can only be a friend & advise her - she will have to live with the conquesnces at the end of the day.

Scarlett.1974

In a word, YES, she is completely barking if she thinks she can do this and get away with it.

Using credit cards that you know you have no intention of paying back is fraud, pure and simple. The consequences of this could be very dire.

If your friend is genuinely struggling then she needs to stop spending on those CCs right now and get some advice regarding going BR from one of the free debt charities. She won't necessarily get into trouble for clearing her CC with the loan and spending on it again (a lot of us have done that), but to carry on spending now and max that other card out would be complete madness. The OR will look into it very thoroughly, make no mistake about that and she could get into a LOT of trouble.

Karen1980

Thanks guys, I have printed this off and shown her and i think her lightbulb moment is about to arrive as it scared her to death ....

Tirian

Ditto the above posters are correct - if you go through bankruptcy proceedings and it is shown that you deliberately borrowed more money when you already knew that you would have to go bankrupt then the usual one year until the bankruptcy is discharged can be extended to up to fifteen years! This would be a Very Bad Thing!! You may wish to point out to her, if she is not already convinced, the following section from the Insolvency Service guide to bankruptcy:

If, during his/her enquiries into your affairs, the Official Receiver decides that you have been dishonest either before or during the bankruptcy or that you are otherwise to blame for your position, he/she may apply to the court for a bankruptcy restrictions order. The court may make an order against you for between 2 and 15 years and this order will mean that you continue to be subject to the restrictions of bankruptcy which are described in section 8 above. You may give a bankruptcy restrictions undertaking which will have the same effect as an order, but will mean
that the matter does not go to court.

saffronflowers

This is not a hollow threat by the IS - I actually know of someone, (through my work) who blew £8,000 the night before going to court to declare himself bankcrupt and was jailed for 18 months - served six!!!!

The OR really hate this as it makes a mockery of bankruptcy - you friend would be extremely foolish to even think about such a plan.

SFx