Reckless spending and BRO

PaulL2 · 13 July 2018 at 5:23PM

Feral_Moon wrote: »

Credit or debt?

Is there a difference?

The OR will perhaps look more closely at new loans, use of credit card etc (both = debt) in the last 2 years, but in my case pretty much all of it started in the year or two before bankruptcy - new consolidation loans, credit card used up until bankruptcy for food, petrol etc - and they didn't have a problem with anything.

Feral_Moon · 15 July 2018 at 1:36AM

PaulL2 wrote: »

Is there a difference?

The OR will perhaps look more closely at new loans, use of credit card etc (both = debt) in the last 2 years, but in my case pretty much all of it started in the year or two before bankruptcy - new consolidation loans, credit card used up until bankruptcy for food, petrol etc - and they didn't have a problem with anything.

Thanks, I wasn't sure whether it was just relating to recent applications. I haven't applied for any credit in over two years but I have existing cards which I've been using, only now they're almost maxed out and I've had to reduce repayments to minimum only on each of them. I can't see any other way out to avoid bankruptcy

PaulL2 · 15 July 2018 at 9:46AM

Feral_Moon wrote: »

Thanks, I wasn't sure whether it was just relating to recent applications. I haven't applied for any credit in over two years but I have existing cards which I've been using, only now they're almost maxed out and I've had to reduce repayments to minimum only on each of them. I can't see any other way out to avoid bankruptcy

I can't see any problem there, then. Even if you had applied for extra credit recently, and used it or not, if it was to make ends meet (i.e. household stuff, petrol, food etc) then they won't throw the book at you as this is what credit is for!

In an effort to reduce my debts, I consolidated two loans into one a few weeks before bankruptcy. It meant a different bank suffered a rather expensive default and seemed a bit unfair, but hey ho! OR never mentioned it.

It's only when you go taking out credit to pay for extravagant things which you will clearly never pay back, or gambling, when they take umbrage. Not if you're simply trying to keep the boat afloat.

Justdoit18 · 23 May 2019 at 4:14PM

I don't want to panic you, but in my experience you may end up with a BRO. I've just got my letter through. The situation was similar to yours. But the OR totted up my debt level and pinpointed the exact month where we could no longer pay the credit bills. She said I should have known I was insolvent a full 18 months before I declared bankruptcy (the fact that I didn't realise wasn't accepted). I stopped applying for credit and using credit cards a year before going BR, but because I'd accumulated debt before that she saw it as reckless spending. My husband is the same although it was with the same OR, so maybe you'll get lucky.

Mnd · 23 May 2019 at 6:24PM

This thread hasn't had any contributions since July, so presumably the issue is resolved by now

Reckless spending and BRO

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