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!

Im only going to advise one thing:

KEEP OUT OF IT

Keep out of it completely. You are just bringing HER stress into YOUR life. She doesn't want your help or advice.

Its her problem. KEEP OUT OF IT!

3luckystars I have come to that conclusion myself now! Its an absolutely ridiculous situation, and gets more ridiculous the more she tells me

Why would I need a get out of jail card, Atlas? I hate owing money and so will never spend more than my means I get that. But surely by going "ree sexism" when in fact a woman is the architect of her own downfall that's what you're trying to do. And it deprives people of their agency.

She is the architect of her own downfall, but bankruptcy is a solution that she should not be madebto feel guilty for.

More men file for bankruptcy due to bad business decisions, leaving customers and out of suppliers out of pocket. But that's less frowned upon for some reason.

You cannot just declare yourself bankrupt when you are not, well... bankrupt.

She has money, she has a job, she has a car... ergo, no judge will declare her bankrupt until she has disposed of all her possessions and money over her bare necessities.

So yes, she CAN be declared bankrupt... after she's lost everything. Not much left for pedicure after that.

She doesn't sound like someone with an education, let alone a medical degree. Are you sure she didn't get her qualification diploma on Amazon?

If she goes bankrupt, she will need to trade down to a lower price car, or do without one for several years.

I don't know if she will be able to carry on working as a GP, so obviously that's something she'll need proper advice on.

It sounds like she will have a substantial payments order for 3 years I think. The Official Receiver have guideline expenditure figures, so they will know what are reasonable amounts to spend on food, travel, child expenses etc for her family circumstances and she will lose just about all her spare money above that. So she might not 'save' money by declaring bankruptcy.

However, she has a good surplus so a debt management plan may be more appropriate as it doesn't come with the (sometimes lifetime) restrictions that bankruptcy does.

Either way, her credit file will be shot for 6 years, so she will not be able to borrow any money and will be forced to live within her means. This could be a good thing, as she may learn to manage on the money she has.

She's either stupid/reckless/delusional, or suffers from a mental illness - bipolar disorder? It's quite common for people to spend massively when going through a manic phase.

I had a friend in a similar position but they owed more, they were very close to going bankrupted but they got help and advice from a debt management company who managed to negotiate fixed payments after combining all their debts into one, they can now manage to live (just about) without adding to their debt and should be debt free in 2 years time (they have been paying it off for 3, so 5 years altogether by the time it’s paid).

It sounds like she will not accept the reality that she is living beyond her means and does not want to change. As an adult she will have to take responsibility for her actions. Most rational people in her place would seek and accept help and stick to repayment plan. If she goes bankrupt she will have any credit cards taken away and even lose her bank account. If she has a mortgage they would take her house away and she will struggle to rent. She will always have to face the question 'Have you ever been bankrupt or taken an IVA'? This would show on a credit check for at least 6 years anyway. When you apply to go bankrupt you must declare any sources of income to the court and they decide if your debt will be paid back or not and at what rate. You can't just choose yourself to right it off. You can lead a horse to water....

More men file for bankruptcy due to bad business decisions, leaving customers and out of suppliers out of pocket. But that's less frowned upon for some reason. citation needed. You're just shifting the goal posts because you can't back your original argument.

Bankruptcy would be a ridiculous solution to the problem!

It would mean she'd have to sell her home and any assets she owns; she'd have trouble getting another bank account and couldn't get any credit; she'd have to hand over any spare money she had (so that £420 would just be wasted!).

Is she able to continue making slightly more than minimum payments on all of her debt? Because that would be the first thing to do and then she could look into a debt management plan with Citizens Advice, Christians Against Poverty (not aimed at religious people) or Stepchange.

She’s an idiot.
Just leave her crack on to sort her own problems out. If she brings it up tell her you don’t want to hear it.

You can work as a salaried GP if you've been declared bankrupt but you can't be a partner in a practice because it violates the terms of the NHS contract. So there will be a cap on her future earnings.

I don't know where you live in the country but the High Court in London has a specific CAB that deals soley with Bankruptcy, perhaps she needs to make an appointment and talk to someone there , to appreciate the reality of what it will mean to go Bankrupt.
Does she realised initially all her assets will be frozen and she will have no access to her original bank account/cash until it is worked out what is considered adequate for her living expenses.
From what you say about her perhaps she needs the shock to her system that bankruptcy will give her.

My sister was like this, always asking for help budgeting-but never following one. She used to say she could only hope someone would steal her identity, as it could only improve her credit. Some people can't face the fact that they have done it to themselves. By handing it to you, if she gets in deeper, she can say that the budget you worked on didn't work and deflect the blame away from herself. None of us likes to look close enough to really see our own flaws, much less make the changes we need to improve our lives.

She'd be a total idiot to go for bankruptcy. If she signed up with a locum agency to do extra hours when her son is with his dad she could probably clear the debt in a couple of years. Getting out from under a bankruptcy will fuck over her life for a lot longer than that.

citation needed. You're just shifting the goal posts because you can't back your original argument.

www.r3.org.uk/index.cfm?page=1114&element=27152 R3 is the trade body for Insolvency Professionals.

'In 2014, there were 20,336 bankruptcies, of which 12,119 involved a man and 8,131 involved a woman

Business failure-related bankruptcies accounted for roughly one-in-three men’s bankruptcies in 2014, but only one-in-seven women’s bankruptcies.

How am I shifting the goalposts?!

I once sold personal loans and had to decline a lady like this. She earned 8k a month and spent every single penny. I couldn't believe it.

I often think high car payments are to blame. These finance agreements dont seem to take affordability into account and people are accepted for monthly payments of £800+. That's 3 x my first mortgage payment!

I hope asking you to help isn't a way of trying to guilt you into bailing her out...

She sounds like an irresponsible idiot if she doesn't think of using the £400odd a month that she has 'spare' to pay what she owes. Some folks have much less than that and are able to manage. I'd leave her to it if she won't get proper advice.

Probably true about car payments - I was surprised when I took out a PCP that they didn't ask me what I earned.

I also told them I was an office worker (and hence usually not particularly well paid) because I couldn't be arsed explaining my unusual job to the salesman.

But whatever the OPs friend does, she isn't going to be allowed anywhere near £420 pm in surplus income if she goes bankrupt or takes out a debt management plan.

The OR etc will allow her to pay her bills, buy groceries, run a modest car etc, and maybe a small amount (£50 pm) for discretionary expenses per month, but the rest will have to go to pay her debts. But also a good point, that if she can pay basic costs (but not expensive luxuries) plus the minimum payments on her debts, she won't be allowed a formal solution, she'll just have to make all her payments, as she agreed when she borrowed the money.

Get her to read this:
bankruptcyexpert.co.uk/can-i-go-bankrupt/can-i-go-bankrupt-if-i-am-a-doctor
If she wants to go bankrupt and still practice medicine she'll need to talk to her practice (and maybe others first).

Hell mend her then. Not your problem. Maybe being made bankrupt will make her grow up!

As said more than once, she can't just decide to go bankrupt, you have to BE bankrupt and she's not.

What will she do if a bailiff shows up? She will have anything of value that is paid for removed. It will likely embarrass her poor child and she will be left watching the wall at Christmas.
To think she can just write off £20k of debt by lying about outgoings makes my blood boil.
For someone so well educated, she is naive at the very least.
Bankruptcy is not a catch all if you have a spending problem. If she wants to live life at this level then she needs to work full time to match her expenditure. Entitled does not go far enough.

You don't get struck of for going bankrupt but for some stupid reason the NHS reserves the right to fire people that go bankrupt. Its just what someone needs when they are in debt troubles being summery fired for going bankrupt.

Basically the GMC wont strike you off unless your bankrupt ion brings something to light that brings your practice into disput aka you commuted fraud / theft or something else illegal aka bribes and the such like.