bankruptcy sahm

[RhodaBull]

Just something I've been wondering about:

If I went on a spending spree - holidays etc - and ran up massive debts and had to declare bankruptcy, what would it matter? I do not work and if everything were in dh's name we'd get to keep house, savings etc. Can this be right?

I hasten to add I'm not in this position, but it strikes me that it seems such a good wheeze that I wonder why more people don't try it.

I was thinking about Martin Freeman's wife who declared bankruptcy when he obviously is very wealthy. I know finances are separate, but don't tell me he wasn't benefiting. Eg if I spent thousands on holidays on a credit card in my name, it would be my debt, but dh would have been a beneficiary. Or doesn't it work like that...

They would look at what you had spent the money on, and your bankruptcy trustee would attempt to recover some of the money to pay back your creditors. If you told them you had bought thousands of dollars of art work, but given it away, they would probably be suspicious and your bankruptcy would probably last longer. I wouldn't really call it a 'good wheeze' but you are correct that if the debts are all in your name and you have a partner who has a mortgage/ car etc in their own name, the impact can be fairly minimized.

Well, yes, if I had a Porsche in the drive then that is an asset that can be seized, but holidays cannot be clawed back.

Also thinking about a business near me. Declared bankrupt leaving many creditors. It was in wife's name but husband and wife continue to live in grand house, children in private schools etc. They have re-opened the same business in dh's name, on same premises. Those adversely affected are up in arms, but apparently it's all quite legal.

I can't believe that's right! Surely not?

I think Martin Freeman and Amanda Abbington aren't actually married, so that probably made a difference. I think the bankruptcy was related to unpaid tax bills, rather than from taking out loans/credit cards. It's hard to see how HMRC could expect her partner to pay her tax liabilities.

If you have no income, then presumably you'd find it hard to take out a loan or increase your credit card limit to without it being a joint application with your husband?

That's true MandMand. Bit of a risky strategy too - if your DH comes on your expensive holiday and lives the high life while you max out your credit cards, then walks out on you leaving you with the debt, you'd struggle to be able to rent a house, some jobs are barred if you've been bankrupt too.

I don't think "unpaid tax bills" is any less bad. If you're self-employed then the tax is no more your money to "forget to pay" than the sap's money who is on PAYE.