To not feel sorry for a bankrupt

[treesntrees]

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

[SusanneLinder]

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]

OP has anyone actually asked you to be sympathetic?

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

[badtasteflump]

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....

[badtasteflump]

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

[TheElephantIsADaintyBird]

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]

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]

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

[diaimchlo]

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

[TroublesomeEx]

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]

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]

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

[Mumsyblouse]

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]

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]

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]

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]

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]

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]

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]

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.

[Mumsyblouse]

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]

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

[GrowSomeCress]

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