To not feel sorry for a bankrupt

(63 Posts)
treesntrees Sun 24-Feb-13 22:13:07

AIBU not to have much sympathy for an acquaintance who has had to declare herself bankrupt because she has been left with debts incurred by borrowing up to the hilt to live the high life. ( Think cruises and expensive holidays). She was retired when she did this and ended up selling her house to pay off some of them. I have some sympathy for people who have worked very hard, perhaps in a business which has gone belly up, and can do nothing else but declare themselves bankrupt but not this. Somehow I feel people who live like her hurt the rest of us because someone has to pay for these debts and eventually it trickles down to the ordinary person in the street

AdriftAndOutOfStardust Sun 24-Feb-13 22:22:45

YANBU

maddening Sun 24-Feb-13 22:22:54

No I do not feel sympathy for her - hope they add extra time for being negligent.

IneedAsockamnesty Mon 25-Feb-13 01:24:06

Is she actually expecting any sympathy?

Greensleeves Mon 25-Feb-13 01:27:03

Well, she clearly has some deep-seated problems and has therefore made poor choices. I do feel sympathy for her, personally. It must be terrifying, and even worse when you know you caused it because you lack the ability to control yourself.

You on the other hand... well, I don't understand your attitude. Is it just judgemental spite? confused

amillionyears Mon 25-Feb-13 01:46:37

There are probably some emotional reasons she did this, that are not necessarily obvious.
Has anyone around her tried to find out why do you know?

ThingsThatMakeYouGoHmmmmmmmmm Mon 25-Feb-13 01:50:47

YANBU. It's stealing. End of.angry

MidniteScribbler Mon 25-Feb-13 02:13:47

I want to know why banks/financial institutions still lend people money for things like holidays. Houses, cars, home renovations I can understand and the value can be reclaimed by selling that property/vehicle if they default on the loan. But to lend money when the person doesn't have enough equity to cover the loan is ridiculous and just adds to the people getting in financial stress.

amillionyears Mon 25-Feb-13 06:40:39

A few of the people who steal ,do it for emotional reasons too.
sad not angry

scaevola Mon 25-Feb-13 06:45:58

She got to retirement age without apparent difficulty, then spent like crazy?

I agree that reckless spending on luxuries which you have no means to afford is wrong and harms others.

A sharp change in behaviour can however be an indicator of other problems. Doesn't let someone off the hook (unless it's early onset dementia or similar), but is worth investigation.

chanie44 Mon 25-Feb-13 06:51:13

A workmates of my other half was in about £20000 debt. He was about to go bankrupt when he was advised by a friend to take out a huge loan before he did - the justification was that of you have to go bankrupt anyway it doesn't matter how much you owe shock

twofingerstoGideon Mon 25-Feb-13 06:59:58

I'm with Greensleeves on this one.

RedwingOnFire Mon 25-Feb-13 07:04:37

What Greensleeves said.

Compassion is a wonderful thing.

TiredyCustards Mon 25-Feb-13 07:05:44

Tricky one, but i'm inclined to blame the financial institutions that lent to her.

OnlyWantsOne Mon 25-Feb-13 07:10:43

Do you know how precisely she spent her money then? There could have been an element of bragging / covering up how hard her financial situation was.

Declaring yourself bankrupt can not be an easy decision to make for people. It doesn't really affect you, sad that you have to even comment about it. Try just being a friend to her.

Tricky one, but i'm inclined to blame the financial institutions that lent to her.

Exactly what I was thinking. You only need to look at the adverts for loan companies where they encourage you to take out a loan to consolidate all your debts plus some more to spend on shopping or a holiday!

ll31 Mon 25-Feb-13 07:59:40

You sound lovely, hope if difficulties ever hit your family you meet with more compassion than you appear to have yourself. .. whatever bad decisionsshe made, losing your home at her age is hardly fun

CloudsAndTrees Mon 25-Feb-13 09:36:26

I don't have a huge amount of automatic sympathy for anyone that has gone bankrupt, but there are times when sympathy is deserved. People get into these problems for all sorts of reason, it's usually more complicated than just saying that they wanted to live the high life at someone else's expense.

I too think the blame lies with companies that allow people to build up so much debt. They are the ones to blame for the rest of us having to pay extra charges to compensate for other people.

All that said, in my experience of a close friend going bankrupt, it really isn't that difficult a process. In many cases the biggest inconvenience is not being able to get a free bank account, but that's a small price to pay for having thousands of pounds worth of debt wiped out for you. It's not like that for everyone, and I know it can be a horrible process, but for many people, bankruptcy is a wonderful thing.

TroublesomeEx Mon 25-Feb-13 09:44:45

I don't have any sympathy for people in this exact position either.

I too think the blame lies with companies that allow people to build up so much debt

I disagree. People are/were greedy. The people weren't passive in the process, they only got into debt because they took it on and were happy to spend the money.

TroublesomeEx Mon 25-Feb-13 09:45:18

You only need to look at the adverts for loan companies where they encourage you to take out a loan to consolidate all your debts plus some more to spend on shopping or a holiday!

But you'd have to be a fucking idiot to think that was a good idea!

Yes, and the point is that some people aren't as obviously intelligent as you are. These are the people the ads are targetting.

The ads clearly say that is it is a great idea to take out one of their loans to consolidate your debts and add a bit more for a holiday. Sadly, a lot of people see this and ignore the "small print".

MrsWolowitzerables Mon 25-Feb-13 10:11:30

What NotADragonOfSoup said.

CloudsAndTrees Mon 25-Feb-13 10:17:19

I agree that people can be greedy and can ignore common sense when they see an easy way to get what they want, but they aren't responsible for the rest of us having to pay higher charges. That's down to the lending companies, because they have a responsibility to the rest of their customers, another customer doesn't have responsibility for anyone else.

Lottikins Mon 25-Feb-13 11:17:30

I feel sympathy for her.LOts.
and if the sale of her house wasn't enough to cover her debts I am suspecting it was spent on more than just holidays.

amillionyears Mon 25-Feb-13 11:21:27

op, even if you dont have much sympathy for her, can you still look out for her?
I dont know whether she regrets it all now?
The thing is , us sitting here dont know her frame of mind.
WE dont know whether she would do it all again, is mentally ill, or now deeply regrets it. It sounds to me like there is something going on with her that you dont know about.

IneedAsockamnesty Mon 25-Feb-13 11:39:16

When banks loan money they charge for it,what they charge changes due to the risk they take. They make huge sums of money by doing so.

When you take a risk sometimes you lose most of the time its the customer who loses a small amount of time its the bank,that's the nature of the game.

SusanneLinder Mon 25-Feb-13 11:51:58

Oh dear God-what a lot of judgy pants comments here. Let me tell you, I have been a Debt Advisor for many years, and there are MANY MANY reasons why people need to declare themselves bankrupt, and its not always a case that people borrow money recklessly.
I deal with many people who are the "working poor" who borrow small sums of money to buy their kids shoes and school uniform.They think they can pay it back. They have no money left over if something goes wrong eg washing machine breaks down etc. Some people have to actually choose between food, rent and electricity
Or how about someone who takes ill, or gets made redundant, or partner takes ill (and no PPI covers for that)?
Why don't some of you get off your high horse, stop reading the Daily Mail and then come and spend a day or so seeing my clients, and listen to their stories.

Jins Mon 25-Feb-13 12:03:19

OP has anyone actually asked you to be sympathetic?

You seem to be enjoying her misfortune. Watch out karma doesn't bite

YANBU. I know of a couple of people who have declared themselves bankrupt. Both of them planned it ahead and bought things or took holidays they could never afford on the basis of being able to write it all off soon....

angry

Susanne I'm sure that's true, all I am going on is my personal experience, not something I read in the the Daily Fail smile

TheElephantIsADaintyBird Mon 25-Feb-13 12:20:23

Yanbu if that is what she's spent it on.
My nephews dad was declared bankrupt a while ago, he'd got in to debt by buying 3 top of the range cars (think jag, range rover etc), bought a huge house and filled it with expensive gadgets, took DN and his family shopping for new things all the time, 3-4 luxury holidays a year, the list goes on.
He was made to put his house up for sale but no one bought it so he got to keep it! Absolutely ridiculous!

If you're stupid enough to think you can spend that much money on all that crap then you don't deserve a bank account or your debts writing off IMO.

TheElephantIsADaintyBird Mon 25-Feb-13 12:22:14

Most of us aren't talking about people like that Susanne. We're talking about people stupid enough to spend £££££ of money they don't have on luxury items they don't need.

diaimchlo Mon 25-Feb-13 12:23:43

SusanneLinder you have saved me a lot of typing there, I was also how judgmental this thread was. I fully agree with all you saidsmile

diaimchlo Mon 25-Feb-13 12:24:38

That should read I was also thinking how judgmental this thread was...

TroublesomeEx Mon 25-Feb-13 12:37:25

6Suzanne but that's not what the OP is talking about is it?

Anyone can find themselves in a bit of a financial fix, think they've found a short term solution and find it runs away with them before they realise it.

I would have sympathy for people in that position, but not people who just took on more debt than they could manage just to keep up with the Jones's or maintain the appearance of a lifestyle they couldn't really afford.

I know of a few people who've found themselves in financial deep water but they all fall into the latter rather than the former group.

TroublesomeEx Mon 25-Feb-13 12:39:34

Elephant that's the category people I know have fallen into.

People who've remortgaged the house to pay for children's fees and expensive skiing holidays and flash cars, who then had to rely on credit cards month to month.

They appear to have it all, but it's all smoke and mirrors and they don't actually own any of it.

GrowSomeCress Mon 25-Feb-13 12:46:38

Suzanne this is a totally different situation, we're talking about cruises and holidays here. Please.

Mumsyblouse Mon 25-Feb-13 12:47:57

I wouldn't feel smug about it, your friend lost her house. So would half the population if interest rates were not being kept artificially low, so all those saying 'they shouldn't have taken out more than they can afford' - if interest rates suddenly went up to 10% or even 15% like in the last recession, you'd still be able to make your mortgage payments, right? (most of my friends wouldn't and are completely honest about this).

Unsecured debt rates soared up to 30/40% on loands/cards in some cases after 2009, mortgage rates are so incredibly low at 3/4% it's ridiculous given the same base rate. So many people are just incredibly lucky that this is the way it fell in this recession, if the consequences of all that cheap borrowing had been revisited on morgages and not on unsecured loans, there'd be a heck of a lot of people who would have lost their houses. As it is about a third of the country is sitting in negative equity.

So, less smuggery, more thanking your lucky stars that you don't have to lose your house or go bankrupt. It's not so bad going bankrupt if you have a partner to support you, but this lady doesn't sound like she did- so she's lost her home and had to live on a minimal amount a week for a year, before being able to restart her life. Fancy swapping?

MeSoFunny Mon 25-Feb-13 12:59:12

A member of our family has declared themselves bankrupt but not after first lying to everyone about cash flow and clearing out his parents' retirement savings as well as taking a large amount of money from us without ever intending to pay it back. We all started off being supportive and sympathetic (clearly) but have all been taken for a ride. It's insulting.

SusanneLinder Mon 25-Feb-13 13:00:55

And so some people say it was all spent on cruises and holidays. Anyone considered that some people spend to compensate for other things going on in their lives-loneliness,mental health issues,bipolar etc?

At the end of the day-bankruptcy is NOT an easy option.Stigmatised for ever cos there are always that box on application forms that has the question "have you ever been declared bankrupt?" In bankruptcy it bars you from certain jobs inc childminding strangely.

There is only one bank account that accepts bankrupts making it difficult for people to even pay their bills, utility companies want a deposit or make you take a prepayment meter, insurance companies now credit check and you have to pay your insurance up front and not by Direct Debit.

I am so glad you all think it is an easy option. And remember, we are all only a couple of paychecks away from destitution.

Jins Mon 25-Feb-13 13:11:23

This isn't a member of OP's family that has been getting sympathy for ages.

THis is an 'acquaintance'. Someone not close enough even to describe as a friend.

So OP thinks it will make a great thread starter about someone she perhaps vaguely knows that has lost everything. Nice

It isn't that long ago that banks were loaning money out for the most spurious stuff. One of my neighbours extended their mortgage to have laser eye surgery. There was little or no guidance and people were encouraged to worry about the future when it happened.

The future's now here

Snootymum Mon 25-Feb-13 13:14:05

I know 3 people that all spent and lived the high life then just declared bankruptcy. One of them even had a load of cosmetic surgery knowing she would be defaulting on the finance payments.

I have zero sympathy for people in that position

britafilter Mon 25-Feb-13 13:14:33

I have been declared bankrupt due to ill health. It is definitely not an easy option, it takes a huge emotional toll and stays on your credit records for six years. I was quite fortunate that I was renting at the time so I didn't lose my home - I think it would have been much worse if I'd lost my home like person in the OP and I'd feel sorry for anyone in that position.

However, there are some inaccuracies on this thread. There are quite a few banks offering basic bank accounts now, which are available free to bankrupts. I had a Co-op account, which offered internet banking and the only difference to a normal account is that I couldn't have a cheque book or overdraft, which I never used anyway so didn't notice the difference.

My utility bills were never affected (I never got into debt with any of my utility bills so they were never made aware of my bankruptcy). Some contents insurers do ask about bankruptcy, but I researched them online and chose from the handful of companies which are known to not ask about bankrupts (and one of these offered the best overall quote anyway).

There are very few jobs which now bar bankrupts permanently, I know of a childminder who took it up after bankruptcy. Even many professional careers aren't affected, once the year of undischarged bankruptcy is over.

I think the worst part of bankruptcy is the stigma, but I avoided that by just not telling anyone unless I was legally required to. I haven't even told my family. (The bankruptcy listings are publicly available but in practice no one I know ever reads the London Gazette where it is listed, and it's not even searchable on Google).

KellyElly Mon 25-Feb-13 13:15:43

I assuming you have lived a blameless and perfect life and have never made any mistakes? If so then YANBU, if not then YABU and pretty heartless to not feel some sympathy for a another human being who is going through a hard time. She may have brought it on herself and is probably painfully aware of this fact but she hasn't committed some heinous crime, she's just been really stupid and is paying the price for it.

TroublesomeEx Mon 25-Feb-13 13:16:52

My BIL and his wife took out an IVA last year.

They have 3 children. They all wear designer clothes, they take expensive overseas holidays, they have all the latest gadgets which get updated as soon as the new version comes out, they have a Land Rover Discovery and a Mercedes.

She doesn't work, he does and earns around £16k. They live in a 2 bed flat.

For them, it's nothing about compensating for anything, it's about wanting to maintain an appearance of wealth. As it is/was for so many people.

I certainly don't think bankruptcy is an easy option, but that's not the point being made here. I just don't think everyone who becomes bankrupt is a victim. One of the reasons they stopped allowing people to declare themselves bankrupt over student debts is because so many people were doing it at 21 just to clear the debts, loans and credit cards they'd accrued during their student days.

And I've just spoken to my brother, one of his friends knew they were facing bankruptcy and he also took out just one more loan and blew it on a fantastic holiday because it wouldn't make any difference as he was going bankrupt anyway.

Feminine Mon 25-Feb-13 13:20:27

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LayMizzRarb Mon 25-Feb-13 13:24:37

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Mumsyblouse Mon 25-Feb-13 13:40:08

For them, it's nothing about compensating for anything, it's about wanting to maintain an appearance of wealth. As it is/was for so many people.

I agree with this, however, I think people are so keen to see the fault in others, they don't look to themselves. Many of my friends are mortgaged up to the hilt with large houses, big gardens, extra bedrooms, kids not sharing bedrooms, all those things are also luxuries (i.e. not necessities) and also paid for with borrowed money. It's just they got lucky that their number wasn't called when the recession hit. Others are smug as they bought a long time ago and so have small mortgages. Again, lucky them.

It's easy to believe that you are very prudent and others are spenders, and indeed, there may be some very prudent MNetters who were both fortunate and sensible in buying their houses/spending their money. But as I say, most homeowners weren't (hence the negative equity) and they need to silently thank their lucky starts mortgate rates aren't spiralling (yet) instead of going on and on about all these people who had luxury holidays whilst they were oh so prudent when getting into debt for their larger than strictly necessary 'luxury' houses.

Not that I have had either a luxury holiday, or a big house, or indeed have been bankrupt, but I hate the smuggery around blaming others for their spending ways on MN- most people overspent, that's why we are as a nation effectively bankrupt (and have to keep borrowing at high rates).

Fakebook Mon 25-Feb-13 13:43:48

I would never laugh at anyone's misfortune, even if they caused it themselves. Karma is a bitch.

GrowSomeCress Mon 25-Feb-13 14:15:00

Fakebook I don't see anywhere on here laughing at it?

TheSecondComing Mon 25-Feb-13 14:21:49

Message withdrawn at poster's request.

expatinscotland Mon 25-Feb-13 14:29:02

And the spiteful, mean-spirited streak on MN continues! Recession brings out the worst in people.

HorribleMother Mon 25-Feb-13 14:32:48

I can muster up some sympathy for most people.

CremeEggScoffer Mon 25-Feb-13 14:51:25

I declared myself bankrupt 4 years ago, was the most terrifying thing I've ever done, my ex-h decided he was going to take loans out in my name and forged my signature, I tried to pay it all back but couldn't sad

Going bankrupt has certainly made me appreciate the money I have in my account, I've no need for overdrafts or credit cards, if I want something I save for it.

Your aquaintance will probably be feeling awful right now.

Feminine Mon 25-Feb-13 16:36:10

Seriously? I was deleted.

Some sensitive types here. Sensitive when it suits I fear.

So, I'll say it nicely. It is very mean to be horrible to people that face financial pain.

Scrazy Mon 25-Feb-13 16:46:21

I know a handful of people that have declared themselves bankrupt. Spending was mainly on designer clothes, holidays and crap they didn't need. There wasn't much loss, kept the houses if they had them by transferring ownership and got it all written off.

I don't have sympathy and I don't know that any of them expected it. I'm sure they were relieved to get things under control. I would object to them doing it again and hope that the system prevents them racking up debt again and make them live within their means.

Scrazy Mon 25-Feb-13 16:48:45

Most of the people I know had it happen to was pre recession, when they printed it in the much read local paper (shame enough). Do they still do this?

IneedAsockamnesty Mon 25-Feb-13 16:53:08

Scrazy yes they do.

And they charge you to go bankrupt no matter what your financial circumstances

Scrazy Mon 25-Feb-13 16:56:40

I haven't seen it in the paper for a while not that I look. It happened to a friend and other friends didn't know until it was in the paper. I could see her spending was out of control.

They may charge but I bet it's a lot cheaper than actually having to pay back what you have blown.

FairyJen Mon 25-Feb-13 16:57:33

Can I point out that it is actually quite easy to recreate a lifestyle image several posters mention things like wearing designer clothes etc. these could have been brought from a charity shop for all you know! I just bought dd some UGG boots for £4.78 on eBay. Roughly same price as cheap tat from primark! Or should I dress her in a bin liner do people don't think we are slashing the cash about??

You cannot know about people's finances and/or lifestyle unless you are actually personally involved in spending their money so why is it any if your business?

maddening Mon 25-Feb-13 16:58:56

They charge a small admin fee which doesn't cover the cost. If there are assets or disposable income some more may be retrieved but most of that covers the cost of overseeing the bankrupt estate.

They review each case - usually you are now bankrupt for 1 year though it remains on the credit file as a discharged bankrupt. If they find a case of negligence or misconduct they can make the bankruptcy last for longer -up to 15 years for thw worst cases.

And it is still announced in a paper.

britafilter Mon 25-Feb-13 17:04:12

Our local paper doesn't print details of bankrupts, unless they are particularly interesting like a celebrity or high profile businessman. By law it's listed in the London Gazette, so it's public information, but hardly anyone would be looking at that, it's just a listing website of insolvencies, notices etc.

It cost me £525 to go bankrupt (there is an additional amount of £175 which I was exempt from paying due to benefits). So it's quite hard to raise this if you're on a low income, but I managed it by stopping repayments of loans, since they'd all be written off anyway.

FellatioNels0n Mon 25-Feb-13 18:25:12

I knew a woman like this once. Mid 40's, she was actually deeply unhappy and lonely, with low self-esteem (in spite of being a lovely warm, intelligent, albeit plain looking person) childless, and with a failed, abusive marriage behind her.

She spent money she didn't have to make herself feel like someone, and like life was worth living. She would go on cruises, shop compulsively, buying clothes and expensive make-up when she had no where to go to wear them. She would sit in Selfridge's champagne bar having lunch by herself as a 'treat'.

I could not really find it in my heart to be angry or bitter towards someone like that, even if some of her debt did 'trickle down' to me.

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