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!

she's a gp who only owes 20k. For goodness sake that should be an affordable level of debt for a gp.

Get it restructured. So make sure not on credit cards etc. Work some extra shifts. Pay it off.

She doesn't want to. Fine. But she shouldn't be dragging you in. And frankly insulting to those without her options and resources.

From what you have written OP, it reads like she was telling you about her debt believing that YOU would solve it for her without her really doing anything.

Unfortunately for her you are more sensible and passed it back to her to deal with.

I would stand back now from this and let her either grow up and sort herself out or watch her lose everything and there is nothing you can do about it.

It sounds like even her family have had enough of bailing her out so have stepped back and allowing her to fail or succeed on her own.

Agree with powerbunting - it's not "that much" for a woman in her position. It's not the level of debt which is the problem - just her attitude towards money.

She's in the extremely privileged position that should she choose to apply herself she could actually be 100% debt free by this time next year.

There are also some professions where going bankrupt means you lose accreditation eg if an accountant goes bankrupt then their professional body will no longer recognise them which can make finding a job difficult. I don't know if the same applies to a doctor or not so she'd best check that with the BMC.

Just read her sister is her guarantor on her mortgage? If she went bankrupt her sister would be liable for the mortgage.

Gizzymum she rents - no mortgage, so sister round be liable to pay the rent until the term of the lease is up.

*would be

Morning, I have just been reading the last posts. @Clutterbugsmum I think you have it spot on, she wanted me to 'help' but in a way that meant she didn't have to do anything and it wouldn't really affect the way she is living.

Basically, from what I can gather, she doesn't seem to learn from the past (where she has been bailed out) and also appears to think she is entitled to the lifestyle she is living because she went to Uni and has a good job. While she lives in a modest rented house, she drives an expensive SUV and, outwardly, looks as if she is doing really well. Image is clearly very important to her although with her current situation I think it is more of a 'fur coat and no knickers' scenario. Perhaps also, although she hasn't said this, she also thinks that there isn't an issue as she gets the credit etc she wants.

We have made list of what she owes and some of it is staggering. She hasn't paid utility bills in years, how she's got away with it I have no idea. She has also defaulted on things that have resulted in fines, unpaid, and taken out many small loans or bought things on HP that she didn't need (furniture, for example.)

I said she needs to get professional help to see what the best options are and she agreed, but said it in a way that I suspect really means she'll do nothing. (I think it's lip service.)

I don't know why she's looking at bankruptcy as her only option. Has she spoken to Stepchange? I'm not an expert, but as she has an income and doesn't owe a huge amount (in the grand scheme of things) they'd probably suggest a debt management plan.

From your last update OP I think you need to quietly withdraw from actively helping her. I would go along with nods and sympathetic noises and suggestions but it does sound like she is keeping her head stuck firmly in the sand. Sadly, you can't do anything about that. I imagine it will do one of two ways, either she will wake up and get her shit together or it will spectacularly implode on her.

This might be a 'you can take a horse to water' type situation.

The thing she needs is budgeting advice and a metorphorical slap around the face to bring her back into the real world. She might be able to get budgeting advice from Christians Against Poverty, but she's not really their target market, being nowhere near poverty.

Would she be able to separate her money into a few accounts and only spend from the 'spare money' account - would she be capable of that?

Account for rent/bills incl sorting out the utilities/debts/annual and irregular expenses like insurance/Christmas etc - pay a set amount into it each month to cover these and not spend from it otherwise.

Another account to pay for things like groceries, travel, DCs expenses and clothes.

Third account that she can spend on her wants on a 'when it's gone it's gone basis' that she pays a budgeted amount into each month, after everything else essential has been covered.

I wonder if she got away with not being cut off from the utilities by claiming to be a vulnerable single parent and forgetting to mention that she was not vulnerable in a financial sense, she just preferred to spend her money on more interesting things than boring bills.

Why are you so invested. She is being an idiot. Don't lend her any money. She should get help. Don't talk to her about it any more.

Has anyone asked whether as a GP she owns shares in the practice? If the practice is owned by the GPs jointly, often they have to take out a mortgage to buy into the practice, so going bankrupt may be exceedingly difficult for her without it effecting her job.

You are probably not the first person she has asked for 'help'. Presumably she has ignored the others advice. She must not worry the same way most of us would if we were in that position, you I suspect will be repaeating advice she has already been given. Step back, you don't need the stress that she presumably is able to ignore/live with....

Point out that if she goes bankrupt she can wave goodbye to the SUV, the nights out, the nail treatments - and, of course, the credit cards and hire purchase arrangements. Then refer her to Stepchange and leave her to it.

You could help her by being with while she sets up a bills account and payment plans for everything she owes and her household bills on direct debit, and a spending account for the rest.

You could also help her by pointing out that unless she wants her son to see bailiffs at the door she needs to get a grip and start behaving like a responsible adult.

A few weeks locuming should mean she can pay off this debt. Surely this is the obviously solution to her.

She has good earning potential and with a few days training she could be knocking out Botox in a beauty salon part time too.

It is all just really odd.

Image is clearly very important to her

In that case she might be more than a little embarrassed when the bankruptcy notice is posted in the local paper and all her patients get to read about her

Just a thought, but as a GP does she give out helpful 'habits have consequences' lifestyle advice? like habitual overeating makes you fat and gives you diabetes? Can she not see her financial bad habits in the same way? That you might get away with bad habits in your youth, but it'll catch up with you eventually?

Bankruptcy would affect her credit rating massively - she wouldn't even be able to get a new mobile phone contract.

Tell her to get in touch with a debt management advisor - the credit card companies can freeze interest without going bankrupt or she can take a guaranteed loan to pay the lot off over a long period with lower payments and less lifestyle impact.
I do feel for her - it's easily done for some people.

Tell her to call Christians Against Poverty 08003280006. They are a fantastic debt counselling service recommended by Martyn Lewis.They also run money and life skills courses.

Can general practitioner really have fake nails 😮 isn’t that a bit dodgy

Maybe she’s hoping a rich man will come to her aid?.

How coincidental that we have yet another thread about a part time GP!

Funny how there has been an influx of threads recently about how GPs are overpaid and living a life of luxury being part time. And now here is another about a feckless part time GP who can’t be bothered to work full time because she wants to see her boyfriend and spend her money on frivolities...

Almost as though there was a concerted campaign going at the moment to smear GPs and turn public opinion against them working part time....