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  • FIRST POST
    • 927
    • By 927 26th Jun 18, 10:45 AM
    • 32Posts
    • 5Thanks
    927
    Reckless spending and BRO
    • #1
    • 26th Jun 18, 10:45 AM
    Reckless spending and BRO 26th Jun 18 at 10:45 AM
    So Iím now going through all my statements and in one year Iíve racked up a load on a Barclaycard. Used it when I had a shortfall in my current account but whatís glaringly obvious is Iíve just spent too much on food, Christmas and birthdays plus the general day to day. To the tune of £7000 plus interest. Is this viewed as reckless spending? Will I be issues with a BRO. Iíd just kept thinking it would all be ok and it isnít. Iím so anxious about it and scared. Can someone please help?
Page 1
  • National Debtline
    • #2
    • 26th Jun 18, 3:49 PM
    • #2
    • 26th Jun 18, 3:49 PM
    Hi there,


    This is unfortunately a bit of a tricky question to answer because there are no set rules and it is ultimately at the discretion of the Official Receiver.


    They will tend to consider factors such as how big your family is and the level of other debt (as you won't be going bankrupt for £7k). I appreciate this can be worrying, but try not to panic. This shouldn't be a treated as a stand alone issue and the application will be assessed as a whole. Good luck,


    Laura
    @natdebtline
    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
    • 927
    • By 927 26th Jun 18, 8:31 PM
    • 32 Posts
    • 5 Thanks
    927
    • #3
    • 26th Jun 18, 8:31 PM
    • #3
    • 26th Jun 18, 8:31 PM
    No - the total debt is £26000 accumulated over 7 years. I had around the same amount 7 years ago but paid £12k off lump sum and the new debt has grown since I had my son. I am on benefits and received some child maintenance payments for around a year. My parents help me out nearly every month (to my shame as they donít know about the debt) and itís come to a bit of a crunch point.
    • Kendoddsdog
    • By Kendoddsdog 4th Jul 18, 9:54 PM
    • 3 Posts
    • 0 Thanks
    Kendoddsdog
    • #4
    • 4th Jul 18, 9:54 PM
    • #4
    • 4th Jul 18, 9:54 PM
    Sorry what is the issue with reckless spending? Will this have an impact on any BR ? Would having a gambling addiction be viewed as reckless?
    • Flyright
    • By Flyright 5th Jul 18, 5:24 AM
    • 331 Posts
    • 185 Thanks
    Flyright
    • #5
    • 5th Jul 18, 5:24 AM
    • #5
    • 5th Jul 18, 5:24 AM
    The OR will examine how you incurred your debts. If you incurred credit when you were already insolvent then that is grounds for a BRO. And yes, gambling would fall into a reckless spending category. The OR will also look at the reason you gave for applying for credit that was spent on gambling.
    • PaulL2
    • By PaulL2 8th Jul 18, 3:02 PM
    • 43 Posts
    • 20 Thanks
    PaulL2
    • #6
    • 8th Jul 18, 3:02 PM
    • #6
    • 8th Jul 18, 3:02 PM
    Gambling is possibly a BRO issue but I doubt racking up £7k on fairly normal stuff would be - most people's bankruptcies involve overspending on credit cards either to make ends meet or to buy luxuries we end up not being able to afford! And very few get a BRO...

    Obviously a £5k holiday just prior to bankruptcy might be an issue (for example).

    In my case I was lucky as the examiner didn't go into detail on my card statements. I wasn't questioned about any purchase, even stuff not long before I went bankrupt. I could have done far worse, if I was a naughty person.
    • debt doctor
    • By debt doctor 8th Jul 18, 9:53 PM
    • 4,288 Posts
    • 5,964 Thanks
    debt doctor
    • #7
    • 8th Jul 18, 9:53 PM
    • #7
    • 8th Jul 18, 9:53 PM
    Hi,

    The Insolvency Service tend to look at borrowing in the last 2 years more than other borrowing, but the stuff you describe is 'normal living' and I very much doubt it would be of much interest.

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • fatbelly
    • By fatbelly 12th Jul 18, 7:07 AM
    • 12,451 Posts
    • 9,499 Thanks
    fatbelly
    • #8
    • 12th Jul 18, 7:07 AM
    • #8
    • 12th Jul 18, 7:07 AM
    So Iím now going through all my statements and in one year Iíve racked up a load on a Barclaycard. Used it when I had a shortfall in my current account but whatís glaringly obvious is Iíve just spent too much on food, Christmas and birthdays plus the general day to day. To the tune of £7000 plus interest. Is this viewed as reckless spending? Will I be issues with a BRO. Iíd just kept thinking it would all be ok and it isnít. Iím so anxious about it and scared. Can someone please help?
    Originally posted by 927
    No - the total debt is £26000 accumulated over 7 years. I had around the same amount 7 years ago but paid £12k off lump sum and the new debt has grown since I had my son. I am on benefits and received some child maintenance payments for around a year. My parents help me out nearly every month (to my shame as they donít know about the debt) and itís come to a bit of a crunch point.
    Originally posted by 927
    Can't see any problem there.
    • Feral Moon
    • By Feral Moon 12th Jul 18, 1:14 PM
    • 2,790 Posts
    • 4,377 Thanks
    Feral Moon
    • #9
    • 12th Jul 18, 1:14 PM
    • #9
    • 12th Jul 18, 1:14 PM
    Hi,

    The Insolvency Service tend to look at borrowing in the last 2 years more than other borrowing, but the stuff you describe is 'normal living' and I very much doubt it would be of much interest.

    DD
    Originally posted by debt doctor
    When you say borrowing in the last 2 years, does this refer only to new applications for credit or would it also apply to increasing debt by spending on existing low balance cards?
    • Flyright
    • By Flyright 12th Jul 18, 4:15 PM
    • 331 Posts
    • 185 Thanks
    Flyright
    It will include all credit incurred.
    • Feral Moon
    • By Feral Moon 12th Jul 18, 4:43 PM
    • 2,790 Posts
    • 4,377 Thanks
    Feral Moon
    It will include all credit incurred.
    Originally posted by Flyright
    Credit or debt?
    • PaulL2
    • By PaulL2 13th Jul 18, 5:23 PM
    • 43 Posts
    • 20 Thanks
    PaulL2
    Credit or debt?
    Originally posted by Feral Moon
    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
    • By Feral Moon 15th Jul 18, 1:36 AM
    • 2,790 Posts
    • 4,377 Thanks
    Feral Moon
    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.
    Originally posted by PaulL2
    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
    • By PaulL2 15th Jul 18, 9:46 AM
    • 43 Posts
    • 20 Thanks
    PaulL2
    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
    Originally posted by Feral Moon
    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.
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