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| *Ostroff, Fair and Company>>>Personal Finance |
Going Bankrupt..........? |
My neighbour went bankrupt last year and a couple of weeks ago bought a 4 year old car and is going on holiday abroad next week for 2 weeks. Does this seem fair? Is bankruptcy the easy way out I wonder? No it doesn't seem fair - we had friends who went bankrupt and they have a bigger house than us, a nicer car, holidays - me and my hubby just seem to scrap by ! It is not uncommon for millionaires to declare bankruptcy! Is a device to evade taxes if you have no scruples! is it the easy way out...............yes and no yes because you lose the stress and worry about debts. you don't have to pay out more money every month to debt than you have left to live on. no because if you don't own your own house already then chances are you will not be able to get a mortgage for at least 5 years, after all who would want to give you a mortgage and risk never getting the money back. and if someone was willing to give you one the repayments are scandalous. you can not apply for a loan over 500 pounds( it think it's 500 anyway) with out permission from the courts. so yeah it is the easy way out, it gives you a clean slate to start fresh from, and at the same time it forces you to live within your means as you can not get credit of any type. so basically if your neighbour is splashing out all this money chances are they have had to save up every penny of it and paid cash up front. The term of bankruptcy is now generally 1 year. The discharged bankrupt can make a fresh start, I think this will change shortly and normal consumer debtors will be encouraged to enter IVAs with their creditors. No one in a bad situation will tell you everything, so you don't know all the details. You don't know which bankruptcy chapter they filed, you don't know how much they still owe, or whether they are losing their home, or whether a family member paid for their holiday abroad so they could come home, etc. I know the laws have changed with regard to bankruptcy as of a couple of years ago in that unless a person has a huge amount of hospital bills then they still have to pay a portion back of what they owe to their creditors. I would suspect they didn't file a Chapter 7 (total release from their bills) because in that case they would have bought a brand new car just after bankruptcy. And when you file for bankruptcy there are things that you can and cannot do, and it hurts your employment and career and renting, etc. and that rating stays on your credit report and keeps you, in the future, from having credit for 7 years (but stays on the report 10 years). So it's not fair to them, wasn't fair that they encountered so many bills (probably some high hospital bills maybe from them or those they were responsible for like maybe ill parents), and no, bankruptcy is not the easy way out. |
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