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libitina

Mortgage Whilst Bankrupt

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This really does worry me.

What possible reason is there for not running up huge debts and then going bankrupt if you are then able to get credit and mortgages afterwards?

I mean it makes me think wouldn't this be a great scam for someone - buy loads of stuff, hide stuff - gift it to spouse, or something, declare bankrupt and then sell that stuff and make a fortune.

I mean I know that's very crude but I just feel like this country is increasingly favouring criminal behaviour - people who actually stick to living within their means and saving for a rainy day are not rewarded in any way other than at the end of the day living the way you believe is right morally.

It seems that these days the moral way to behave is not the most successful way to behave, or am I being too cynical?

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It seems that these days the moral way to behave is not the most successful way to behave, or am I being too cynical?

No, you're not, unfortunately. :(

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Guest Guy_Montag

This really does worry me.

What possible reason is there for not running up huge debts and then going bankrupt if you are then able to get credit and mortgages afterwards?

I mean it makes me think wouldn't this be a great scam for someone - buy loads of stuff, hide stuff - gift it to spouse, or something, declare bankrupt and then sell that stuff and make a fortune.

I mean I know that's very crude but I just feel like this country is increasingly favouring criminal behaviour - people who actually stick to living within their means and saving for a rainy day are not rewarded in any way other than at the end of the day living the way you believe is right morally.

It seems that these days the moral way to behave is not the most successful way to behave, or am I being too cynical?

It's one of the most depressing symptoms of modern life, those that live life according to the rule book always seem to miss out compared to those who are selfish & just look after themselves.

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Having worked for a number of lenders, even the 'sub prime' lenders usually require that the bankruptcy has been discharged.

Schemes that don't require this will involve a significant amount of extra interest.

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I'm thinking of moving abroad for 5 - 10 years.

Currently I am totally debt free, I have a 10 k overdraft facility that I don't use. I reckon I could probably get a 15 k personal loan from the bank. Add to that maybe a few credit cards. I could probably raise £100k+ in credit without too much difficulty. What's to stop me doing that to finance my move abroad and declare myself bankrupt here?

I could come back to the UK in 10 years with a clean sheet.

I spent 15 years paying off debts that I earned in my younger irresponsible days - was I a mug or what?

Edited by Sisyphus

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I think mortgage companies are more forgiving because the last thing people want to do is lose their home and with the house market as it is, they're not likely to make a loss if the lender defaults.

I wonder if that will come back and bite him on the ass?

TB

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I can't abide the patronising moralism that always breaks out when the topic of bankruptcy crops up here. Who cares if someone runs up huge debt then goes belly up, how does it affect you? After all:

  • The bankrupt's spending beyond their means has helped the economy grow
  • The banks might take a hit, but with their massive profits it's not like they can't afford it
  • Making bankruptcy an easier option can only encourage more responsible lending
  • the ability to make a "fresh start" encourages entrepreneurship and risk taking. If your business idea goes belly up you can always pick yourself up and start again.

Just remember: as long as an endless supply of free and easy credit remains the foundation stone of the gravity-defying economic wonderland we live in, bankruptcies will abound.

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The banks might take a hit, but with their massive profits it's not like they can't afford it

And, duh, who do you think ends up paying for that? Ah, the savers and investors (and anyone whose pension fund has bank shares in it).

Making bankruptcy an easier option can only encourage more responsible lending

LOL. The banks don't give a damn as long as the interest is coming in, and they've probably packaged up the loan and sold it to your pension fund anyway.

the ability to make a "fresh start" encourages entrepreneurship and risk taking.

Encouraging people to 'take risks' by taking out a vast, lie-to-buy mortgage on a BTL flat in the hope of massive price inflation is hardly a benefit to the economy.

Edited by MarkG

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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