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Mrliberty

Mass Bankruptcy

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I know the Government have recently made it easier to declare oneself bankrupt. If there is a HPC and the accompanying recession, obviously a lot of people are going to be in it up to their necks. The easiest option for many will be to declare themselves bankrupt. Is it likely that the laws will then be tightened (probably with a lot of lobbying from the banks), or will they remain the same?

I’m sure I’m not going to be the only one who’s furious if the majority of people are going to be able to just walk away and start again. If they were able to do this, and there were people going bankrupt on a massive scale never seen before, how much would the banks be at risk?

All opinions gratefully received.

Edited by Mrliberty

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as soon as they changed bankruptcy, you knew what was coming - it wasnt hard to think this through!!

Personal bankruptcies should be at least 3 years charged for the bankruptee before they are discharged

It does really get to me as completely defaces the point of savings!!

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I know the Government have recently made it easier to declare oneself bankrupt. If there is a HPC and the accompanying recession, obviously a lot of people are going to be in it up to their necks. The easiest option for many will be to declare themselves bankrupt. Is it likely that the laws will then be tightened (probably with a lot of lobbying from the banks), or will they remain the same?

I’m sure I’m not going to be the only one who’s furious if the majority of people are going to be able to just walk away and start again. If they were able to do this, and there were people going bankrupt on a massive scale never seen before, how much would the banks be at risk?

All opinions gratefully received.

I don't believe bankruptcy is the easy option that some make out - you will lose everything and your credit rating will be ruined for years - not just the 12 months of the bankruptcy. That means you'll be condemned to a life renting and paying ridiculously high rates on your loans. There will undoubtedly be serious social problems arising from the hardship caused but I don't believe the Government could care less about this section of the population anyway so I don't think it will bother to change the rules

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If new products/services emerge to effectively cater for the growing number of bankrupts then I see it as a increasingly appealing option - and one that might sustain GB's 'miracle' longterm

Just run up massive ammounts of debt as a 'clean' credit individual - go bankrupt and continue to prosper in the growing bankrupt demographic...

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Have you ever seen the film 'Falling Down' starring Michael Douglas?

He's your average white collar family man that just snaps one day and goes on a rampage, killing morons etc. (not seen it in a while, so correct me if I am wrong)

I can quite easily see that happening to more and more people if they start to see that working hard all their lives has been pointless, and idiots are able to live frivalously (sic) with such lack of sense and barely any consequence.

I know for a fact that when the time eventually arives for me to draw my pension (stop laughing at the back), and some stupid civil servent or politican comes out and admits that they have plundered the fund or that it's now worth sod all, I shall go one better than Guy Fawkes and actually blow the ba$tards to hell and back.

Ooh, I think i need a brew to calm down. Sorry if I have gone off on one there. Please don't call the men in white jackets. :-)

Sorry for veering off topic somewhat there, but I needed to say that.

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Have you ever seen the film 'Falling Down' starring Michael Douglas?

He's your average white collar family man that just snaps one day and goes on a rampage, killing morons etc. (not seen it in a while, so correct me if I am wrong)

I can quite easily see that happening to more and more people if they start to see that working hard all their lives has been pointless, and idiots are able to live frivalously (sic) with such lack of sense and barely any consequence.

IIRC he was not 'aware' of reality (the cop at the end briefed him before he was forced to shoot him)

This Government is good a hiding things - however, 'Falling Down' wouldn't happen on a mass scale - if you have the temprement to do that then you will at some point - these are not the 'majority' - the species wouldn't survive if it were...

Edited by dnd

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IIRC he was not 'aware' of reality (the cop at the end briefed him before he was forced to shoot him)

This Government is good a hiding things - however, 'Falling Down' wouldn't happen on a mass scale - if you have the temprement to do that then you will at some point - these are not the 'majority' - the species wouldn't survive if it were...

I was giving a somewhat daft scenario, but if you work hard all your life, save, pay into a pension etc and then find that those that have either sponged off the state all of their lives or borrowed heavily and squandered it, end up in the same situation as you or better, are you honestly telling me that you will just bend over and accept it?

I won't.

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My ex-partner went bust owing about £30k. She is currently paying £150 a month (Taken direct from her wages) + a charge has been placed over her share of the house so when it is eventually sold the whole amount she owes is paid back to her creditors before she gets a bean ;)

So if you own a house with equity in it Bankrupcy would seem not such a soft option

Of course if you don't own a house then you can basically walk away from most of the debt as far as I can tell anyway :ph34r:

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My ex-partner went bust owing about £30k. She is currently paying £150 a month (Taken direct from her wages) + a charge has been placed over her share of the house so when it is eventually sold the whole amount she owes is paid back to her creditors before she gets a bean ;)

So if you own a house with equity in it Bankrupcy would seem not such a soft option

Of course if you don't own a house then you can basically walk away from most of the debt as far as I can tell anyway :ph34r:

I reckon your bear could do with a nice pair of red glasses :P

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I don't believe bankruptcy is the easy option that some make out - you will lose everything and your credit rating will be ruined for years - not just the 12 months of the bankruptcy. That means you'll be condemned to a life renting and paying ridiculously high rates on your loans. There will undoubtedly be serious social problems arising from the hardship caused but I don't believe the Government could care less about this section of the population anyway so I don't think it will bother to change the rules

True to an extent, but you are only talking what, is it six years before you are totally clear? If you have been foolish enough to be overstretched on your own home, plus had BTL properties on top, it could easily lead to negative equity sums in 6 figures. I know which option I would choose.

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I suspect this is why they relaxed the laws in the first place.

Maybe, but I doubt they'll make the banks happy if a large fraction of the population are getting out of negative equity through bankruptcy. I'd guess that when the Tories are elected they'll impose US-style bankruptcy laws.

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Maybe, but I doubt they'll make the banks happy if a large fraction of the population are getting out of negative equity through bankruptcy. I'd guess that when the Tories are elected they'll impose US-style bankruptcy laws.

the new bankruptcy laws were devised in the context of a buoyant economy and the belief on the part of the legislators that this would continue for eternity. I also suspect that feelings may change when things start to go mammaries perpendicular.

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Maybe, but I doubt they'll make the banks happy if a large fraction of the population are getting out of negative equity through bankruptcy. I'd guess that when the Tories are elected they'll impose US-style bankruptcy laws.

the banks will simply respond by tightening their own private lending restrictions - the market will end up being self-policing, and house prices will subside

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A great wheeze a friend of mine came up with when he read about the new bankrupcy laws was this:

Start getting credit cards from age 18, finance your University years via Student Loans and aforementioned credit cards, taking as many credit limit upgrades as you can get (and sign up for any additional cards) to fully enjoy yourself at Uni. Ensure you have a stash of cash (£3-4K) once you have graduated (it's important you DO graduate), then declare yourself bankrupt. Spend 3-4 years travelling using aforementioned cash to get you started. Return to UK at end of 4th travelling year and engage in employment at your leisure. Hey presto, one degree at no cost to yourself and 4 years of character building (and CV enhancing travel under your belt). You can put the (now historical) bankrupcy down to the inexperience of youth!

Now I haven't really looked into this to see if it would be feasible (I'm a bit old) but it would be a nice payback for tuition fees if you could get your student loans written off :lol:

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I read recently that they introduced the new bankruptcy law to encourage entrepreneurs to take a few more risks, in order to achive a more "entrepreneurial attitude". They didn't imagine that the average Joe would use it as an easy way out of his personal debts, but that is exactly what's happened!

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A loose bankrupcy climate is not a blow to the bankers and that’s why there was no attempt to block the legislation that brought it about.

Could you imagine how they banks would look as more and more people became literally slaves of the banks constantly persued and harrassed for money with no apparent way out? There’d be some sort of revolution and Greenshirts marching down the streets again.

The banks are not the least bit concerned about writing off bad debt - nothing seems to stop their ever-juicier profits. Wtiness the bumper results released by the big banks int he last few weeks despite weakness elsewhere in the economy. It’s like a football team not caring if they let a couple of goals in because they know they’re guaranteed to score three.

Once there’s a captive market of bankrupts to ensnare the banks can hit them with sub-prime high-interest goodness. And it can all start all over again with even greater profits.

Degrades the currency? Makes a mockery of saving, hard work and trying to be responsible? You bet.

A great wheeze a friend of mine came up with when he read about the new bankrupcy laws was this:

Start getting credit cards from age 18, finance your University years via Student Loans and aforementioned credit cards, taking as many credit limit upgrades as you can get (and sign up for any additional cards) to fully enjoy yourself at Uni. Ensure you have a stash of cash (£3-4K) once you have graduated (it's important you DO graduate), then declare yourself bankrupt. Spend 3-4 years travelling using aforementioned cash to get you started. Return to UK at end of 4th travelling year and engage in employment at your leisure. Hey presto, one degree at no cost to yourself and 4 years of character building (and CV enhancing travel under your belt). You can put the (now historical) bankrupcy down to the inexperience of youth!

Now I haven't really looked into this to see if it would be feasible (I'm a bit old) but it would be a nice payback for tuition fees if you could get your student loans written off :lol:

Or even easier: Just take the weasel bankers up on that half a rainforest of offers they dump on your doorstep every week, use as much credit as you can to blow on concealable assets like gold, antiques, etc. then go bankrupt. Within a year you can have a bank account and credit card and you'll be sitting on, quite literally, a gold mine.

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Have you ever seen the film 'Falling Down' starring Michael Douglas?

He's your average white collar family man that just snaps one day and goes on a rampage, killing morons etc. (not seen it in a while, so correct me if I am wrong)

I can quite easily see that happening to more and more people if they start to see that working hard all their lives has been pointless, and idiots are able to live frivalously (sic) with such lack of sense and barely any consequence.

I know for a fact that when the time eventually arives for me to draw my pension (stop laughing at the back), and some stupid civil servent or politican comes out and admits that they have plundered the fund or that it's now worth sod all, I shall go one better than Guy Fawkes and actually blow the ba$tards to hell and back.

Ooh, I think i need a brew to calm down. Sorry if I have gone off on one there. Please don't call the men in white jackets. :-)

Sorry for veering off topic somewhat there, but I needed to say that.

I am a man in a white jacket...your reaction is totally understandable...but beware, some would say that you were in the early stages of a socio-economic model of mental illness... ;)

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Have a look at how many ministers in government take a high position in a bank when they leave office. They feather their nest first then join the bank. Job Done !! Barstewards !!!

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I am a man in a white jacket...your reaction is totally understandable...but beware, some would say that you were in the early stages of a socio-economic model of mental illness... ;)

That is a distinct possibility. Either that or I was just bored and in a mood at work.

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A great wheeze a friend of mine came up with when he read about the new bankrupcy laws was this:

Start getting credit cards from age 18, finance your University years via Student Loans and aforementioned credit cards, taking as many credit limit upgrades as you can get (and sign up for any additional cards) to fully enjoy yourself at Uni. Ensure you have a stash of cash (£3-4K) once you have graduated (it's important you DO graduate), then declare yourself bankrupt. Spend 3-4 years travelling using aforementioned cash to get you started. Return to UK at end of 4th travelling year and engage in employment at your leisure. Hey presto, one degree at no cost to yourself and 4 years of character building (and CV enhancing travel under your belt). You can put the (now historical) bankrupcy down to the inexperience of youth!

Now I haven't really looked into this to see if it would be feasible (I'm a bit old) but it would be a nice payback for tuition fees if you could get your student loans written off :lol:

I guess the other option would be - go bankrupt and then emigrate where the banks never trace your credit history anyway

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the banks will simply respond by tightening their own private lending restrictions - the market will end up being self-policing, and house prices will subside

I agree totally, you might be able to decalre in solvent and be free to manage your own finances in 12 months but the banks won't forget that quickly. They might never forget as the points system they use to credit score you if often kept very secret.

I guess the other option would be - go bankrupt and then emigrate where the banks never trace your credit history anyway

Bankruptcy isn't that simple. Once you declare all your finances are scrutinised and they nominate a third part to control your money.

All bank accounts are frozen and your assetts seized. If you're planning this make sure you withdraw the money over a long period and store it in cash....do not use banks.

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bankruptcy stays on your credit file for 6 years

The bankruptcy is listed forever in the london gazzett archive

They sell your house if their is equity in it

They sell your car if its worth more than about £1000

All your bank accounts are frozen / closed

You can only open a basic cash card account with no switch debit card etc

Your bankrupcty is advertised in your local paper for all your neighbours and friends to see

If you have surplus income after your living expenses are paid around 80% of the surplus will be paid to your creditors for 36 months, and any increase in income will have to be declared to the official receiver.

so if you've got nothing you have nothing to lose!

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bankruptcy stays on your credit file for 6 years

The bankruptcy is listed forever in the london gazzett archive

...and IIRC mortgage applications ask if you've EVER been bankrupt - your commiting fraud if you lie about this...

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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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