To think it's ever ok to declare bankruptcy

[jududy]

Just that? Is it ever ok . It seems to be one of the worst things people can do in society , financially.

If it’s what you need to do to get back on your feet, yes! Going on to start another business and setting up another trail of distruction after yourself not so much.

Just to get back on your feet after a messy and protracted divorce?

I think so, if you've no real prospect of paying back your debts. Anyone making an unsecured loan to anyone ought to take account of the risk that they might not be paid back, try to quantify it, and make their decision on whether to lend the money accordingly.

Bankruptcy can be very helpful in getting someone back on their feet when they have no other option. It's not the worst thing anyone can do financially by far, fraud & theft are far far worse.

It’s not something to do lightly and I would judge someone who is in that position because they can’t control spending sprees or they over indulged and got into debt. In that case I do have a problem with it, it’s selfish and self inflicted.

Different situation when someone has genuinely struggled to earn enough for everyday modest living for their family and ended up in debt through no fault of their own.

I realise my opinion may not be seen as kind but I think a lot of people share it even if they won’t say it.

There's nothing at all wrong with going bankrupt.

It is what it is. Sometimes there is no other option.

Nothing wrong with it at all. If you can’t pay your debts, you can’t pay, and bankruptcy can be what you need. I work in this field, and there’s a big push to get rid of the stigma of bankruptcy. There are also other options if you have little or no assets and low income these days, such as debt relief orders.

However what is very wrong, and a criminal offence, is to squirrel away money in accounts you don’t declare, transfer it to a friend or relative or in any way hide money or assets from the Official Receiver or trustee, in the home of getting them back later, once your debts are cleared.

Not saying you were going to but that might be what you were thinking of when you said “is it wrong”.

My best friend had to go into bankruptcy after her c*nt of an ex-DH led her with tens of thousands in debt he'd racked up on her name during an incredibly abusive marriage.

No judgement from me. @Teenagers2grownups0 is being judgy, but apparently also expects to know the ins and outs of a ducks arse to decide whether their judgement is warranted. Real life isn't that detailed. You don't need to justify yourself to anyone.

Just make sure you understand the long term ramifications - it can make renting a new home difficult for example, should you have to move during the various statutory periods. Same for financial orders. Get some really good and independent advice.

DH had to do it after he had tried to sure up a failing business with personal debt.

We were fortunate that we had kept our finances completely separate (his accountant insisted on it luckily) so it has had almost no impact on me.

But we can never have a joint account, will never have a joint mortgage and are limited with insurance providers etc.

We also live in a much smaller house than we’d like because we can’t apply for a joint mortgage and count both incomes. We can only have what I can afford on my own. It’s a source of frustration 6 years on!

But it was 100% the right thing for him to do in the circumstances. The business should have been wound up earlier but he wasn’t in a good place (his business partner committed suicide and left him in a bit of a state both in terms of bereavement and finances).

It's a perfectly valid solution to a problem. However as it has long term financial consequences for anyone, it's better to look into other debt management solutions first such as IVAs or debt repayment plans.

Ex couldn’t even get a phone on contract due to previous bankruptcy. He couldn’t get a current account for years…….. it’s a big decision with impact for a long time afterwards

Going bankrupt should be seen as an absolute last resort and not be entered into lightly. Apart from fact there are financial consequences as a result of going/being made bankrupt for the next 6 years, there is still a stigma attached to it and it might be harder to deal with the reality of that than you think.

If there are no other options and the person cannot make the payments, what’s the alternative? Perhaps selling a spare organ or something?

Come on. There is a legal mechanism in place for a reason. Yes it can be abused, but for some people the weight of debt being lifted from them probably saves their life.

The alternative of life indebtiness didn't really work, along with debtor prisons.
It's a process that gives people second chances and literally saves people's lives. But the consequences are often not understood fully and the impacts on everyday life are probably more now than they ever have been.
From insurance, hiring a car, renting a place to live, phone contracts, etc. The list is pretty long and extensive. Even visas to work in other Countries are impacted.

Wrong in what sense?

It's there as a legal protection to relieve people from crippling debt.

It's also important to note that it's rarely a get out of jail free card, although obviously it will look like that for a minority.

For many, by the time they declare bankruptcy, their debt will have been inflated by interest and charges meaning that they will have already repaid a significant proportion of the money they've borrowed.

Also, following bankruptcy, assets are seized and/or there is a 3 year income payments order, meaning that you have to give up the vast majority of your disposable income towards your debt.

If it is your only option then yes but the impact should be understood and it should be anticipated that in future financial institutions will not accept your business as you are deemed.too high a risk. Which is fair enough in my mind.

It will also bar you from certain jobs. Re. stigma - perhaps it’s better not to destigmatise entirely (it is actually ok to think that some situations aren’t good or desirable), but redirect the bulk of it at those who think it’s a ‘get out of debt quick’ option, rather than the very big deal with far reaching consequences that it actually is.

Of course it’s “OK” - it’s the legal solution to having serious debt that cannot be repaid without great hardship and prevent debtors being harassed. It’s a lifeline to many.

It shouldn’t be a first solution, but if none of the other options are realistic then it may well be the most pragmatic solution to file for bankruptcy, take the hit to your credit rating and all the restrictions that imposes for a defined period than get further and further into a quagmire, ruining your life for much longer.

You have to be clear on the process and all it’s consequences.

@bobandhisburgers

Bankruptcy can be very helpful in getting someone back on their feet when they have no other option. It's not the worst thing anyone can do financially by far, fraud & theft are far far worse.

I'm willing to have my mind changed, but I don't see how it's morally different from theft. Someone else offered goods or services in return for payment; you took the goods or services but didn't pay.

(I do understand that it is not theft because of the legal designation. In the same way that killing someone is not necessarily murder. But I don't think being legal makes it right.)

@BunnytheFriendlyDragon

Wrong in what sense?

That by not paying your debts then other people may loose their business and livelihood.

I've met a man recently who has come out of bankruptcy last year.
He and his exw bought a house in boom times in a good location but one lost their job and the other took a huge pay cut . He took on more work but they couldn't keep up payments on top of other debt from previous car loans and home furnishing loans.
They split up due to the stress of it all along with other factors and when it came to divorce ( and this is the bit I don't understand) his accountant advised that they go insolvent ( don't understand that) , suggesting to come to a repayment agreement with banks and him paying mortgage on house for a number of years after when exw would take over mortgage and keep house in total , but his exw refused so he went bankrupt .
Anyone understand this ? He seems good with money but I'm worried about going into long term relationship where finances are involved .

No. Don't understand that. If there are assets they need to be liquidated to pay off the debts. Or did the husband go bankrupt to force that to happen?