Pro's and con's of personal bankruptcy

[Dolph]

Of course the amount is relevant.They cant just decide to charge 'x' number of pounds.The charges have to be proportionate to their costs.Under the Unfair Terms in Consumer Contract Regulations the charge should not exceed the cost to the provider.
Obviously the Banks disagree and thats why there is an ongoing Court Case which the Banks are now taking to The House of Lords.

Indeed, the unfair terms in consumer contract regulations does not apply to service or product charges, only to penalty clauses, so the banks are right to keep going with this objection.

I'm still waiting for the moans about the unintended consequences if the banks do lose the ability to charge customers who insist on spending money that is not theirs... The approaches that will be taken to stop that occuring will not be pretty.

 

[krooton]

I'm 1 year in to my IVA after racking up £20k worth of debt on silly things when I was younger. I'm very happy with how it's going, and my credit history will be reset after the 5 year period ends.

My gf made one of her exes file for bankruptcy (he was owing £80k!!!), and said when they came out the court or whatever, she saw some other guy come out all grinning saying "So easy! 3rd time for me", what a plonker!

 

[SixTwoSix]

My gf made one of her exes file for bankruptcy (he was owing £80k!!!), and said when they came out the court or whatever, she saw some other guy come out all grinning saying "So easy! 3rd time for me", what a plonker!

Strange...if you file a second time for bankruptcy it stays on your file hell of a long time, sure it's something like 15 years iirc...how old was this guy?

I declared myself bankrupt about 2 years ago now, credit file is already rebuilding, got a barclays basic account straight after and got a visa debit card about 12 months ago. Just giving it a little longer until I apply for a mortgage, I know i'll pay loads extra but it's the cost of being such a useless idiot with money in the past.

 

[Rich_L]

I'm still waiting for the moans about the unintended consequences if the banks do lose the ability to charge customers who insist on spending money that is not theirs... The approaches that will be taken to stop that occuring will not be pretty.

Not pretty? In other words the banks will have to start charging people fairly for the services they provide, instead of subsidising the costs of people who have money with penalty charges obtained from those that don't.

It's wealth distribution from the poor to the rich, it's immoral and underhand frankly and the sooner the 'not pretty' scenario of people paying what they should starts the better

 

[Manlove is my forte]

It seems to be there are two issues with the system

1) Credit is offered too easily to people that are completely unable to manage it

2) Bankruptcy is too easy, and seen as an easy way out of avoiding debts.

3) The repercussions of Bankruptcy do not seem severe as they used to.

If the OP's Debts are as great as he makes out, then he should be focusing on repaying them, not going on holiday (he may have paid for the holiday in cash months ago but no-doubt the debt was there) spending £200 on cloths, and god knows how much on other stuff.

He needs to take some responsibility for his money and his life, not live the highlife and expect someone else to pick up the tab.

 

[Dolph]

Not pretty? In other words the banks will have to start charging people fairly for the services they provide, instead of subsidising the costs of people who have money with penalty charges obtained from those that don't.

It's wealth distribution from the poor to the rich, it's immoral and underhand frankly and the sooner the 'not pretty' scenario of people paying what they should starts the better

Paying what they should still works to redistribute wealth from the poor to the rich, because the rich will be able to offset their charges against the money their investments make for the bank, whereas the poor will not be able to (unless you're actually going to claim that banks should be prevented from factoring in the total net cost of a customer)

I also would be at all surprised to see increasing restrictions on direct debit and card payments for those who constantly fly close to their limit, possibly a minimum account level before they will be honoured (because both card payments and DD are not instant or instant checks, a debit card works more like a check with a guarantee card than anything else, with the exception of Solo/Delta), because the alternative involves upgrading almost all point of sale equipment and a massive increase in the back end computing power needed to manage the transactions, costs that would again have to be passed on to the customer.

 

[SixTwoSix]

1) Credit is offered too easily to people that are completely unable to manage it

This is what happened to me, i obtained a £3k loan, a £2.5k overdraft on my personal account and a £2k overdraft on my business account in the space of 24 hours. At the time I was in a position to repay them comfortably, then life happened, things went badly for me, my business collapsed and I ended up in a minimum wage job with no possible way to repay with the amount of interest charged. Had they frozen the interest I could have repayed eventually but they wouldn't have it.

2) Bankruptcy is too easy, and seen as an easy way out of avoiding debts.

Took me about 6 months of thinking about it, less than 30 minutes in the court.

 

[krooton]

Strange...if you file a second time for bankruptcy it stays on your file hell of a long time, sure it's something like 15 years iirc...how old was this guy?

Late 40s, early 50s.

 

[Dolph]

I do think bankruptcy has become too easy, in an attempt to make it better on those who genuinely fell into problems through no real fault of their own, it has instead become a debtors charter. perhaps we need to make the law more flexible and give more power to the court to decide how 'punishing' bankruptcy should be on a case by case basis...

 

[SixTwoSix]

I do think bankruptcy has become too easy, in an attempt to make it better on those who genuinely fell into problems through no real fault of their own, it has instead become a debtors charter. perhaps we need to make the law more flexible and give more power to the court to decide how 'punishing' bankruptcy should be on a case by case basis...

Although I did have no choice but to declare myself BR it is far too easy. Added to that when I had to chat with the judge, he was very calming and relaxing, told me not to be embarrased, said i'd walk down the street and see people who are BR all over the place without knowing it. Told me to see it as a fresh start and he was happy for me, lol!

 

[Le_Petit_Lapin]

I feel I need to find a way to "shove two fingers up at the system" because they are starting to take the ****

That is a really stupid and childish reason for declaring bankruptcy.

Its your debt, you ran it up, the credit companies didn't force you to spend the money, you did it on your own accord. Its your own bloody fault you're in debt, seriously you sicken me. Honest to god, you really do sicken me to the pit of my stomach.

You seem to expect to be able to take a free ride and spend other peoples money as you please, you're supposedly massively in debt yet you still seem to think you can carry on spending other peoples money as you please on holidays and clothes. You say the holiday was bought months ago, that really wouldn't matter to someone who is truely bankrupt, if you were seriously this short on cash, you would have been in a similar position months ago too.

I really am disgusted at you. Its your money, you spent it, man up and pay the people that you borrowed it from back. You're like a little bloody child who mother has spoiled with buying him sweets all the time he was in any shop, yet now you're being asked to pay your own way, you're stomping your feet, having a tantrum, and yelling "its not fair!".

You should be ashamed of yourself.

 

[Manlove is my forte]

This is what happened to me, i obtained a £3k loan, a £2.5k overdraft on my personal account and a £2k overdraft on my business account in the space of 24 hours.

Too much too fast, imo. This is part of what made the credit crunch. Banks were too willing to give out debt, I suspect they were not too worried about this debt as if the person got into trouble, they would look to "consolidate the debt into one cheap payment" which means the banks no longer have that debt on their books (they sold it to another company).

I'm hoping that the finance system gets truely shaken up so that unmanageable debt is much harder to get into and multiple loans are harder to come by

The most I have been in debt (other than the mortgage) is 5k and I focused all my time and money on clearing it.

Took me about 6 months of thinking about it, less than 30 minutes in the court.

Far, far too easy. If it was business related debt then I can appreciate it being a fairly straight forward process. But personal debt should not be as easy. IIRC there used to be jail time for such financial negligence. Shame the prisons are full.

 

[Dangerous Dave]

I also would be at all surprised to see increasing restrictions on direct debit and card payments for those who constantly fly close to their limit, possibly a minimum account level before they will be honoured (because both card payments and DD are not instant or instant checks, a debit card works more like a check with a guarantee card than anything else, with the exception of Solo/Delta), because the alternative involves upgrading almost all point of sale equipment and a massive increase in the back end computing power needed to manage the transactions, costs that would again have to be passed on to the customer.

Not sure where you get that from all debit card transactions are authorised at point of sale exactly the same way as Visa/Mastercard transactions.

 

[SixTwoSix]

Far, far too easy. If it was business related debt then I can appreciate it being a fairly straight forward process. But personal debt should not be as easy. IIRC there used to be jail time for such financial negligence. Shame the prisons are full.

It was a combination of both, my business is what gave me the credit rating to obtain this amount of borrowing. I could have repaid the entire amount in around 2/3 months had I needed to so I spent it willy nilly on whatever I wanted. However due to extreme personal reasons i'm not going into my business folded and wasn't able to repay.

So really I spent without any forethought on the basis I could afford to repay, then put in a situation where I couldn't.

 

[Dolph]

Not sure where you get that from all debit card transactions are authorised at point of sale exactly the same way as Visa/Mastercard transactions.

Not always.

http://en.wikipedia.org/wiki/Debit_card#Offline_Debit_Card

Maestro and Visa Debit in the UK can act as both online and offline debit cards, with the difference being determined by the point of sale software.

And

http://en.wikipedia.org/wiki/Debit_card#Issues_with_deferred_posting_of_offline_debit

Most supermarkets use this system for low value (less than £50), non cashback transactions, as do many utility companies etc when you make a payment over the phone (hence why they say the amount will be taken from your account in the next three working days).

Only Solo and Visa electron are online only cards.

http://en.wikipedia.org/wiki/VISA_Electron
http://en.wikipedia.org/wiki/Solo_(debit_card)

 

[HarryPainful]

That is a really stupid and childish reason for declaring bankruptcy.

Its your debt, you ran it up, the credit companies didn't force you to spend the money, you did it on your own accord. Its your own bloody fault you're in debt, seriously you sicken me. Honest to god, you really do sicken me to the pit of my stomach.

You seem to expect to be able to take a free ride and spend other peoples money as you please, you're supposedly massively in debt yet you still seem to think you can carry on spending other peoples money as you please on holidays and clothes. You say the holiday was bought months ago, that really wouldn't matter to someone who is truely bankrupt, if you were seriously this short on cash, you would have been in a similar position months ago too.

I really am disgusted at you. Its your money, you spent it, man up and pay the people that you borrowed it from back. You're like a little bloody child who mother has spoiled with buying him sweets all the time he was in any shop, yet now you're being asked to pay your own way, you're stomping your feet, having a tantrum, and yelling "its not fair!".

You should be ashamed of yourself.

Well said and 100% agree.

 

[Manlove is my forte]

That is a really stupid and childish reason for declaring bankruptcy.

Its your debt, you ran it up, the credit companies didn't force you to spend the money, you did it on your own accord. Its your own bloody fault you're in debt, seriously you sicken me. Honest to god, you really do sicken me to the pit of my stomach.

You seem to expect to be able to take a free ride and spend other peoples money as you please, you're supposedly massively in debt yet you still seem to think you can carry on spending other peoples money as you please on holidays and clothes. You say the holiday was bought months ago, that really wouldn't matter to someone who is truely bankrupt, if you were seriously this short on cash, you would have been in a similar position months ago too.

I really am disgusted at you. Its your money, you spent it, man up and pay the people that you borrowed it from back. You're like a little bloody child who mother has spoiled with buying him sweets all the time he was in any shop, yet now you're being asked to pay your own way, you're stomping your feet, having a tantrum, and yelling "its not fair!".

You should be ashamed of yourself.

Well said,

It seems like too many people these days are looking for a free ride. I just don't understand how this generation has become so crap with money. Everyone seems to want to live the high life regardless of if they can afford it or not.

 

[Dangerous Dave]

Not always.

http://en.wikipedia.org/wiki/Debit_card#Offline_Debit_Card

Maestro and Visa Debit in the UK can act as both online and offline debit cards, with the difference being determined by the point of sale software.

And

http://en.wikipedia.org/wiki/Debit_card#Issues_with_deferred_posting_of_offline_debit

Most supermarkets use this system for low value (less than £50), non cashback transactions, as do many utility companies etc when you make a payment over the phone (hence why they say the amount will be taken from your account in the next three working days).

Only Solo and Visa electron are online only cards.

http://en.wikipedia.org/wiki/VISA_Electron
http://en.wikipedia.org/wiki/Solo_(debit_card)

I think you should stop getting your information off wikipedia that information is out of date. In the age of fast cheap data connections almost all debit card transaction are authorised "online". I know this as I support Base24 which is the software that runs the backend of the worlds point of sale systems.....

 

[SixTwoSix]

I just don't understand how this generation has become so crap with money.

I know it's a short answer, but i'd say it's that we've had 20+ years of children raising children, a benefits society, families without any real money so as soon as the kids get offered credit at age 18 they're happy to take it.

 

[Deadbeat]

That is a really stupid and childish reason for declaring bankruptcy.

Its your debt, you ran it up, the credit companies didn't force you to spend the money, you did it on your own accord. Its your own bloody fault you're in debt, seriously you sicken me. Honest to god, you really do sicken me to the pit of my stomach.

You seem to expect to be able to take a free ride and spend other peoples money as you please, you're supposedly massively in debt yet you still seem to think you can carry on spending other peoples money as you please on holidays and clothes. You say the holiday was bought months ago, that really wouldn't matter to someone who is truely bankrupt, if you were seriously this short on cash, you would have been in a similar position months ago too.

I really am disgusted at you. Its your money, you spent it, man up and pay the people that you borrowed it from back. You're like a little bloody child who mother has spoiled with buying him sweets all the time he was in any shop, yet now you're being asked to pay your own way, you're stomping your feet, having a tantrum, and yelling "its not fair!".

You should be ashamed of yourself.

So very, very much +1. I went to uni and came away with about £3,000 credit card bills and a £2,000 overdraft, and no degree. I'm paying it back now that I'm working in a real job, but the interest alone was adding £150/pcm and I could just about stay on top of that before this time last year. I seem to remember hearing about some recent financial turbulence resulting from people being lent money they can't pay back, seems to have had some large-scale global fallout. You're a part of that. Make sure you tell your kids when they're refused a mortgage.