AIBU to presume she can pay back the money owed rather than go bankrupt?

[JemimaPyjamas]

Semi posting for traffic, semi asking a genuine AIBU!

A friend I have known for ages, but have only started to see almost daily as she used to live on the other side of the country, is in a self inflicted financial mess.

Despite having an excellent career, she has taken out loans, bought from catalogues, bought new expensive items on HP, not paid utility bills etc etc and now is almost £20,000 in the red.

She has been asking me to help her get out of the mess she is now in (she confided this has happened, to varying degree's, most of her adult life.) So, we worked out her money together and she has just over £420 'spending' after covering her rent, bills, food etc. She now thinks this is 'only just enough' for things like nights out and trips to the hairdressers and isn't really much at all.

I said to her that I think this should go towards the money she owes, and then she said she is 'better off just going bankrupt as it'll take forever to pay off' and it'll mean she can start with a clean slate.

I have told her this is wrong, and I am also not entirely sure she could even do this by choice considering the options she has? (She also works part time, so could earn another £300ish after tax by working 5 days a week as opposed to 3.)

AIBU to presume that she would have to both work full time and pay back what she owes, and they would go through all her spending with a fine tooth comb?

I have been trying to look at answers to these specific questions but everything is a bit more general, or working on the basis that the person in the red has far less spare cash a month.

Thanks in advance!

The first step to getting it sorted is to contact step change or money advice service. A judge will not grant bankruptcy unless you can show that you have a reference number for one of the big advisors. They will go through everything incoming and outgoing. They can apply to the creditors to freeze the finances and interest.

The utility companies tend to have repayment programmes where they match your repayments. I just helped a friend with their water. It was 2k and they for every £10 they paid the water matched it. For the last 1k, they gave £20 for every £10 payment made as it showed commitment and helped to get them in a better situation. So potentially, say 9k of utility debt will cost 3-4k to repay over time.

The money advice.step change will go through all incomings and outgoings. For less than 20k they will suggest a dro if you have more than £30 A MONTH spare after strict essentials. So if you pay all your bills and you have £220 spare, they take it. If you have £420, they take it. If you have less than £30 then you need a DRO for debts below £20k and I believe that is around £90. Full 3 months statements for every account, credit card etc has to be provided

For bankruptcy for debts over £20k you will need to pay around £780 for the paper work to be submitted. The judge will only accept it if you have been through the above steps and it is the ONLY RECOMMENDED SOLUTION. Then you submit 3 months of accounts for banks and credit cards to the official receiver. The OR then goes through it, looks at income. If you can afford to pay it, they will take earnings to see it paid. If they think you have been running up debt intentionally to go bankrupt, they can climb up your arse looking for the money that has been spent. They can prevent you ever getting credit again if you go bankrupt more than once. They are as powerful as the tax man and in some ways more.

Her name will be published in the papers if she goes bankrupt. But I can not see a judge in the land allowing her to go bankrupt with £420 a month spare.

Sorry that should say that if you have less than £30 spare they will suggest a DRO, which is like a mini bankruptcy. If you have more than £30 its a repayment plan and they take it all over the £30 so if you have £120 they take £120 etc so for that she would lose £420 that she has spare but its the only viable option for her to follow.

She needs to work out a repayment plan with MA and get the interest frozen

This is really helpful, thank you

I've only skimmed through but...

1. She needs to seek proper debt advice. Bankruptcy isn't the easy way out as already discussed.

1. This sort of erratic spending behaviour sounds like it could be a symptom of a mental illness to me. For me personally, when I'm depressed I end up spending recklessly, but it's symptomatic of other conditions too - bipolar disorders in particular.

As she’s a GP, she most probably thinks she ought to have a nice life and be able to afford things like a haircut, nails, etc whenever she wants them. I’ve noticed that people in professional jobs can sometimes think they ‘deserve’ a nice life as they have good jobs, without realising money doesn’t stretch as far as it used to (particularly as housing costs are so high).

I have a few friends who got into debt this way, but luckily pared back their spending when they realised their salaries weren’t going to cover the same things that it would have in the past.

Until your friend gets her head round the fact that she simply isn’t able to afford the lifestyle she wants (despite being a GP and I assume on a good salary), she won’t be able to get herself out of this debt.

I think she has a mistaken and rose-tinted view of bankruptcy!

Basically someone else decides how you manage your finances, what you need to live on. To pay off your creditors that person can remove and sell your possessions up to and inc your house. You can't take out loans or have a credit card, many banks won't even let you have a basic bank account with them if you are bankrupt.

It's not just pay a fee and all your debts are written off! And depending on who she owes and how much she could even end up in prison.

She's an idiot!

Far better she contact someone like step change and gets therapy for her overspending.

Omfg! She's a GP?! I'm on another thread being told how wonderful and unappreciated GP's are, how they know how real life works (despite their high salaries) this is weird timing!

She needs to grow the fuck up! When you're in debt you sit your arse at home when you're not working and you don't waste money on nights out, hairdressers, manicures, and whatever else crap MILLIONS of us live without.

Even more shocking she has this attitude when many of her patients will be on the bones of their arse! She should be utterly fucking ashamed!

One of the few times I think showing them the thread would be a good idea.

Actually I wonder if going bankrupt is something she can even do as a GP given they're essentially self employed. I think it would lead to her job going too.

"so she has her sister as a guarantor at the moment." If she went bankrupt she could well be landing her sister in the shit too then! What a selfish irresponsible fuckwit! If you're the sister I would highly recommend you extricate yourself from any financial links to her whatsoever.

Her behaviour is obscene frankly!

I am not the sister. Her sister is the guarantor for the house she is living in, which, as far as I am aware, is up to date with the rent. Her sister won't be liable for anything else though would she, I am presuming not but I am not very clued up with these things!

Like I said before, this sounds even more ridiculous written down!

There's too much stigma against bankruptcy on this thread.

Even the charity Christian's Against Poverty says bankruptcy is the best route against poverty for some in serious debt.

"The roll-out date was optimistic, but the project has worked. The name 'bankruptcy' still spooks people, but it has taken the stigma out of it to some degree," says Mr Cowley, of Christians Against Poverty.

Ironically, 90% of users say they would recommend the system to family or friends. A recommendation, no doubt, that they would rather not have to take up.

[https://www.google.co.uk/amp/s/www.bbc.co.uk/news/amp/business-38668084]

www.google.co.uk/amp/s/www.bbc.co.uk/news/amp/business-38668084

There's too much stigma against bankruptcy on this thread.

Nah, there is stigma against people on high salaries, yet not even working full time, with few responsibilities getting themselves into debt over hair dye and fake nails and thinking someone else should bail them out.

Bankruptcy is a very good solution for those who need it - those who have no other realistic choice.

It is not a good option for someone with £420 left over every month and prioritising things that the Official Receiver will not allow.

Sounds like she to used to her family bailing her out rather then her actually having to sort out her mess.

Unfortunately until everyone withdraws their 'support' and she is faced with the consequences of her actions and that very well maybe going bankrupt, but that well be the last resort.

Nah, there is stigma against people on high salaries, yet not even working full time, with few responsibilities getting themselves into debt over hair dye and fake nails and thinking someone else should bail them out.

How sexist. Would it have been better if she spent the money on more 'manly' things like a car and gadgets?

When her creditors extended her credit, they took the risk that she may not repay. She should absolutely claim bankruptcy if that's the best option for her.

And I say this as someone who has never borrowed money since my student years and mortgage.

It’s not sexist M4! It would be sexist if people just assumed the woman wa spending on those th8ngs. It’s just factual. And yes, it would be just as bad if the money was wasted in gadgets.

I’d be concerned if I were her sister.

Can't be bothered RTFT but tell her to look into a DRO, she's only allowed £50 spare a month but they factor in haircuts and clothes etc. She needs to owe under £20k.

How sexist. Would it have been better if she spent the money on more 'manly' things like a car and gadgets? - There's always on here who tries to use sexism as a get out of jail free card for irresponsible/stupid/bad female behaviour.

Women are advertisers' target market. I really couldn't give a shit if those companies who target women lose money through women declaring bankruptcy.

There is sexism involved. Women are paid less than men and yet are encouraged to spend more.

Hi all, been with her this afternoon.

JudasPrudy apparently she cannot have a DRO as her car is worth too much.

She also egged up her outgoings so she looks like she has less spare cash than she does to whoever it was she spoke to today (a debt charity, I can't remember the name now - sorry!) When she told me this I said she was being 'even more stupid' that I first thought, which didn't go down terribly well.

The people she spoke to today advised bankruptcy, apparently, but she is panicking about losing her car. I said the car was the least of the issues here, a comment which brought our evening to an animated close

Women are advertisers' target market. I really couldn't give a shit if those companies who target women lose money through women declaring bankruptcy I don't get feminists sometimes.

Why would I need a get out of jail card, Atlas? I hate owing money and so will never spend more than my means.

But that doesn't make me blinkered to the sexism in our society.

She’ll lose the car if it’s worth more than £1-2k, no question. If she’s fabricated outgoings she may well get caught out.

Oh well, it’s her life, if she wants to mess it up, it’s up to her. If she’s going to lose the car anyway, why not sell the car and use it to pay the debts.

Atlas, are you not a femenist? Why?

What about if it's on finance, MissMalice (am asking for me rather than her)

*feminist