Bankruptcy/IVA

[boro1986]

Why does everyone seem to be opting for this i really dont understand it. I know credit cards companies will give them to anyone (i dont have one) but how come people live beyond their means then declare themselves bankrupt???

[ummmm]

Hello you

It seems the easy option I think. They soon find out that it's not

[redcrx]

bancruptcy is the new black!
I think there is a small number of people why see it as an easy option and the advertising for some of these debt solution companies does nothing to show the reality.

[Octavius]

It provides a lawful intermittent solution for being in a financial predicament.

You must first file in court saying you are �insolvent� (i.e. no cash or saleable assets to pay your bills). You have to arrange a settlement plan with creditors and the court, and you �discharge�, meaning settle your amount overdue with creditors (usually for a lower amount than the original bill, thus giving creditors some of their money back.

Good things:
- Legal protection from creditors
- Takes care of most of your debt
- You may get to keep your home
- May stop financial ruin
- Enables a fresh start

Bad things:
- Bad Credit
- Pay some debt
- Go to court
- Loosing your assets (house and car etc)
- Loss of privacy

As said, some find the financial burden too much to bear and it becomes a necessity. Others think, incorrectly in most cases, that it is an easy process and that the debt is 'written off' entirely.

[Lore]

I've been watching those 'spendaholics' programmes, I think it's shocking how someone in their early twenties can get themselves into thousands upon thousands of pounds debt and not even have a mortgage to include into that figure.

[fayelc123]

I have an IVA.
I do see what you are saying about some people maybe, although i dont think it's right to judge people just because they get into debt, i was stupid & admit that, but i also had reasons and circumstances for this.
Plus, with an IVA you do actually pay your debt every month for 5 years so i dont see how this is an easy option.
I think it's great that truely genuine people who are struggling can get help.
Although, i suppose there are some people out there who do see it as an easy option & abuse this

[raysparx1]

Not everybody that declares bankrupt wants to,my Brother in law was made banrupt about 6 years ago,and it was not his fault, he owed approx �1000 tax and �5,000 vat but he was owed �27000. but the 3 companies that owed him money went down the pan, his house was re-possesd and sold at auction for �50,000 less than the market value, he was then asked by the Building society for the shortfall,it was a terrible period for them, luckily they have come through it, the silly thing is when asked if he had credit cards he said no, he was advised that if it happened again get as many as you can and spend to the limit then go bankrupt as credit card debts are written off, if this is true I do not know, seems daft to me if it is.

[boro1986]

I am not criticising far from it but its talked about as it is an everyday occurance years ago it was very much a taboo subject but not sterotyping but 20 somethings get in so much debt and oh well declare myself bankrupt. There are some genuine cases but these are adults who cannot look after their financial affairs!!!!

[boro1986]

Furthermore i blame the credit companies who give credit willy nilly with very little checks or on the individuals ability to pay

[raysparx1]

you are 100% right boro, the card companies bring this on themselves, shame they never really lose by it though cos all they do is screw the losses out of the normal users with excessive charges, these cards are given out far to easily, I was offered one just before christmas with a �15,000 limit, is this a joke.

[unruliejulie]

when we went on our hols last year, at manchester airport there were a couple of blokes asking for you to fill out this form for a credit card. They were a good laugh and my hubby did so. He said he just needed so many names and then he could go home so we obliged, no big issue. About 2 weeks after we got home my hubby had a new credit card through the post closely followed by his pin number. that was all it took. We thoght we were just putting our names down, we didnt think it would be approved so easily and never expected a card through the door.amazing

[Ethel]

I find it hard to believe that a man about to leave the country for a week or more, presumably with his family, was happy to write down his name, address and other information for perfect strangers.

He is very lucky he didn't come home to a completely empty house, or have his id stolen.

[unruliejulie]

never gave that a thought ethel but they were from a proper credit card company so i dont think that was very likely. Still, i guess you never know these days. The house wasnt empty though but i can see what you're saying. That could be the case of you giving your name to anyone these days though couldnt it? Even the people who work in banks etc have acess to your personal details, can we ALWAYS trust them? Im not so sure. Whats to say that is never abused.???
I had a friend who was contacted on the phone at home after hours by the young lad who was working in the building society because he fancied her.

[Pippa68]

Mr P never saw it as an easy option. He went bankrupt 9 years ago, and in actual fact should have done in much sooner.

He was left by his ex wife to struggle with a negative equity property, debts from paying for his divorce etc. As he was legally bound to pay maintenance (via CSA) as well as spousal maintenance (no, he wasn't a wealthy celeb..his ex had a savvy solicitor) there was no option but to go bankrupt.

He hasn't been in debt since. Not that he hasn't had the opportunity!

Unfortunately there is no other option for most people.

[R~B]

when i got taken for thousands a few years ago i decided that i would do the decent thing and not go bankrupt, i rand everyone i owed money to and told them i was in trouble, most of them were ok with it but 2 took me to court and i got CCJ's against my name!

its now been 5 years and i have paid back every penny and i look back and to be honest with you, i wish i had gone bankrupt!!!!!

[bobtheduck-]

anyone that gets into debt only have themselves to blame, its an old cliche but if you cant afford it dont get it. stick to that and you will never be in debt

[boro1986]

I have to agree with the last comment to me people use a credit card cause they cannot afford it!! they still have to pay it back at a later stage with the 20% interest card companies charge

[Pippa68]

..and strangley enough Mr P had no credit card debts.

[whiskeysheri]

I applied for a credit card purposely for a holiday. It was interest free for 9 months and I cleared it in two. It was a spur of the moment holiday and I knew that I could repay it and I haven't used the card since.

I might be wrong, but isn't it supposed to look good on your credit report if you have something like a credit card and borrow small amounts that you know you can pay back?

My dad went bankrupt about 8 years ago and it ruined his life. He had his own business trading as (now runs a limited one) and his accountant made a huge mistake on the books. The VAT man then got involved and there was no way of proving what the accountant had done... then he did a runner (the accountant, not my dad). The debt was around �100,000, I think!

My dad lost everything. It's only just now that he's been accepted for a mortgage. No way was he 'living beyond his means'.

[Pippa68]

This is the thing isn't it WS ~ not everyone gets into debt by their own hand.

Mr P has often said that if I hadn't been there to support him he would be 6 feet under by now.

[whiskeysheri]

Aww, that's 'cause you're fab, Pippa! :o)

I'm just thankful my dad is so strong, anyway. This happened just a few months after he and my mum split up; then only seeing us kids every other weekend and trying to rent a house.