Would you judge someone if you found they were bankrupt?

[rabbit12345]

This question. How would you/would you judge someone who had applied for bankruptcy?

Firstly as a friend or an interviewer.

I know aibu for not giving further details but I wanted a response based on the bankrupt fact not the reasons why etc..I will explain why though after considering the responses.

It depends on the circumstances. Someone who had run a business and something such as business rates or being undercut by scum such as Mike Ashley led to bankruptcy I would have every sympathy. If you frittered your money or tried to live in a large house beyond your means, or took drugs, then no.

OP I know how you feel. You feel like the only person in the world going through this. That everyone is going to think negatively of you. I found once we opened up to friends, it was amazing how many shared their debt stories. Friends who seemed to have it all on the surface. Actually we probably seemed like that. Please signore the negativity on here. X

I know people can end up bankrupt through no fault of their own. I think I would judge people more on whether they try to repay the people they owe debts too.

I bought something from a store that went bankrupt before I received my good but the owner went out his way to make sure I eventually received them. I respected him a lot for that.

If I had been made bankrupt i would feel awful knowing that other people would have lost money because of my bankruptcy.

Bankruptcy is never an easy option but some people are reckless with money then go bankrupt to wipe their debts and so they have a 'clear slate'. I'd judge the hell out of them. I know people that have done this.

I'd like to think if I went bankrupt I would still try to pay off my debts even if it took a long time.

Rabbit. I'm sorry you are going through this. It must be really stressful. I presume you've looked on MoneySavingExpert bankruptcy forums. There looks to be loads of great advice and lots of support.

Whatiwant that is one thing you can’t do. Once you are bankrupt your debts and assets are passed to the OR. I have some stock that I wanted to hand back to a supplier that would clear my debt with them but have been advised that I can only do this if there is a specific clause that gives them ownership until goods are paid for. Unfortunately there is not and so I should not be favouring creditors by clearing only one debt.

Yes I am on MSE which is great for the practical advice but no-one tells you how it really is like mumsnet. I am really struggling with the social stigma at present. I need to hear it all, the good, bad and ugly.

To the poster who said pension pots should be cashed in, how would that help?

That was me. It might help somebody else from going bankrupt by increasing the dividend.

The trouble with insolvency is that it is infectious; the creditors of a bankrupt are at risk of going bankrupt too. The better the dividend the less the risk.

I wouldn't judge someone because they went bankrupt, not without extra information. I've professional experience of bankrupts and there are so many reasons why it happens that it's impossible to judge simply on the fact of someone going bankrupt.

OP, you shouldn't let public opinion sway you from NOT going bankrupt if it's the right thing for you. It exists for a reason and personal circumstances can so easily change. And an IVA is not necessarily suitable for you, it depends on your circumstances and whether the creditors would accept your proposal. It isn't an alternative to bankruptcy as you can always go bankrupt, but you cannot guarantee an IVA will be accepted.

You should inform yourself of the positions you are not allowed to hold if you are bankrupt, as there are a few - like being head of the milk board (!).

You should also check the terms and conditions of your employment as you may be contractually obliged to tell them. Same if you apply for a job, many places credit check as part of their pre employment checks and it will show up for six years following the bankruptcy, so for the year you are undischarged and five years after your discharge date. (credit agencies keep records for six years). Some jobs will automatically not employ you (like banks or high up in local government) but most are fine with it. You can easily check this before employing.

They key is to be honest - like I said, most employers won't mind but if you say you haven't been bankrupt and they find out you have, you'll not be employed or lose your employment because you were dishonest not because you were bankrupt. The fact someone is bankrupt is public information and easily accessible to anyone who wants to know.

Highly recommend calling Stepchange and discussing with one of their advisors.

@Andrewofgg pensions are exempt from your estate when considering bankruptcy

As long as you weren't trying to dodge the rules I wouldn't judge you as a friend.

No I wouldn’t judge
Not on either situation

I was told by someone today they were bankrupt- to be honest never thought anymore of it until this thread appeared and I realised that no I didn’t judge them and it certainly didn’t alter the way I was with them

Not in a million years would I judge a friend for being bankrupt. There are so many reasons why someone could end up in that position. I've been close to it and it's shit enough without worrying about people's judgement.

I went bankrupt in my early 20s for a really small amount because I simply couldn't afford to pay off a bank loan after a few difficulties and a few things going tits up in my life, was under pressure from the bank to do so, and had no one to help me out. (Ironically I had to borrow money to pay the bankruptcy fee because I couldn't afford to pay it). I felt terrible at the time and deeply ashamed for many years after. I now am married, have a good credit rating, a mortgage etc but even now still have a sense of shame on me and hate to remember this horrible horrible time in my life.

To think people would judge me badly if they knew is horrible.

We are all falible, all have the potential to go through hard times. Please don't judge a bankrupt. It is rarely anything other than a last resort and really really bad time in someone's life

OP I feel for you. It gets better though.

Trudie why would you "happily judge"?

Because judging is fun?

I was brought up very strongly to be careful with money though, as grandmother was bipolar and unable to handle finances, father from a young age had to bail her out of problems.

It would depend firstly on why and secondly on their attitude to it. I know people who have declared bankrupt despite their best efforts and someone who sees it as a get out clause for being fucking useless and irresponsible.

No, I wouldn't. There are so many different ways in which life can go tits up for people, it certainly isn't always fecklessness or any kind of personal failure. I wouldn't assume anything about a person's character from bankruptcy. I'd like the same open-mindedness extended to me if my life ever goes off the rails.

Depends really. A self-employed person becoming bankrupt is a different kettle of fish to an employed person doing it. Often someone with a company can declare the company bankrupt with very limited personal liability, while for a sole trader or partnership it’s often a last resort. Many employed people do it so they are debt free in a few years - know one guy who’s done it three times (he still has assets they’re just in other family member’s names).

No but I absolutely would if it happened more than once

no

Hi OP, now you’ve explained the situation, it’s clear that it wasnt your fault (just bad luck) and I feel so sorry for you.

My business has suffered in the past by people/companies going bankrupt, more than once, owing us huge debts and simply setting up business again a few months later using a slightly different name.

I also know of someone in your situation though who declared due to bad health.

It’s tricky. I assume you cant ask family for help? If not then in your shoes I’d do the same.

Good luck

I judged the developer round here that makes a habit of going bankrupt, but if I met someone new I wouldn’t. I would be intrigued to know why and how much they owed, but that’s because I’m nosey.

Righty or wrongly, organisations increasingly use financial stability as one way of assessing whether to offer a candidate a job. This has come about through increasing regulation in sectors such as financial services.

Yes, it's harsh and it does create a viscous cycle where someone is trying to get their finances back on track by getting a job, or improving finances through a better paid job, but they can't because their past record becomes a barrier.

On the positive side, it is worth giving a brief explanation when applying for a job because certainly the public sector claims to assess each case on its merits. Thing is, if the candidate has had a financially abusive relationship for example, and the abusive ex ran up bad debts in that person's name, which blackens their credit history, an explanation to a prospective employer would be viewed more favourably than other reasons (being financially wreckless with credit card debt). Unfortunately when someone has had challenges it can feel exposing to have to give all the gory details about one's past. As an employer, I would be receptive to an explanation, because I'd think at least they've been honest about it.

And on a personal level, I'd want to give the person not judge them, we all have our story in life and it can go tits up at any time.