BR adverts to cease!

[Adam Davies]

Hi
I read the BR notices in my local paper and have done for years,well before I had my own troubles.I used to see if I knew anybody.
Last week in my local there were three notices of the ORs intention to pay a dividend,all were under 3p in the £1.It all seems both a waste of time and money,almost Victorian in it's values.
We have the insolvency register,surely that's enough ?
Regards

[sjw]

dont see the need to increase payments in br surely bringing the iva payments down to meet br would be better and why is it that there are a few people out there who feel that br should be more of a punishment than it already is - some seem to believe that it is the easier option however what about the risk to assets such as your family home or car which are protected in iva surely thats the main reason people chose to go with an iva and not because they are so keen to pay their creditors. i think you chose an option that best suits your circumstances and im sure we would all love to be in the position to pay all our debt but unfortunately life does not go as planed. x

[ianmillington]

Some very interesting thoughts there Wen.

If I can pick up on your 3rd paragraph, the legislation is already there. S273 of the Insolvency Act already provides for the Court to appoint one of its local IPs to advise on whether an IVA is more appropriate. This takes place when it is considering whether to make a Bankruptcy Order. It's never been used very much, and has probably now fallen into disuse.

Ian

[Adam Davies]

Hi
I didn't know that Ian,very interesting and would stop any abuse of bankruptcy if it were used.
Regards

[wen]

I thought that legislation was only to do with those with a decent amount of equity in their assets and an IVA F & F offer may be more appropriate, whereas someone with a disposable income and no assets would have their order granted and an IPO arranged later on, when it's rather too late to consider an IVA?

[ianmillington]

Hi Wen. When there's a debtors petition the Court "shall not" make a bankruptcy order if

estate exceeds £4k

debts are less than £40k

No prior bankruptcy, no prior composition/scheme of arrangement

AND it would be appropriate to appoint a person to prepare a report under Section 274.

This would rule out cases where the sole asset is an IPO/IPA, but it's not restricted to property. The other point is that it's down to the judge to consider it to be "appropriate" i.e it has to be viewed as an ill-advised petition.

There is no corresponding provision for a creditors petition.

Ian

[North East Derbyshire CAB]

Hi all,

This topic has certainly caught the attention of posters on this forum and we suspect it will gradually become a hot topic all over the Debt Advice Industry / Sector as the possible implications sink in.

However as we have already stated it is very early days and everyone will probably be a lot wiser (or possibly just a little wiser) after Mr Darlings budget. It would come as no surprise to us at all if things turn out very differently to what some (including NEDCAB) might now expect.

The above said, we are of the opinion that any legitimate option (which bankruptcy certainly is) that relieves the sometimes dreadful stress, worry and other serious problems that debt can bring and helps people make a genuine fresh start has to be a good thing.

There is a set procedure for bankruptcy as we are sure those who are knowledgeable on the subject no full well, eg District Judge, Official Rceiver interview and possible IPOs, BROs & BRUs and the rest.

Taking the above into account we are a little concerned by what is meant by Debt Avoiders in relation to bankruptcy and so called abuse of bankruptcy and wondered if those who have made any such statements would like to clarify excactly what this means.

[ladyc]

Personally I would have thought that Bankruptcy was certainly not the easiest option. Surely It is the last step as it has the stigma of failure about it and no one wants to feel like that.
I also think that putting this in the local paper is absolutely disgusting. Your debt and financial circumstances are surely between you and your creditors and not your neighbours etc.
Before going bankrupt all options should obviously be dicussed with the creditors but if they won't accept all that you have to offer I think then there is no choice.
It is up to the experts and courts etc. to
sort the issues but no two circumstances are the same and no one should judge people without the facts.

[The Lawyer]

Interesting discussion. I am leaving an IVA company at the ned of this month and setting up a bankruptcy walk through service. I hav ebeen trialing this with those who have been rejected at IVA meeting or those who have rejected uplift requests. 90% of those offered the bankruptcy option have taken it up. The reasons are not that they vare avoiding debt, they have offered to pay, but that they could not keep to the incredibly tight budget being forced by creditors. They realise that it is simply not practical to try to live on a shoe string for five years. In bankruptcy they can be discharged in ayear and pay an IPO or IPA for a maximum of three years.
I don't blame people for taking the bankruptcy option. That is what bit is, an option.
On a separate note I think that the growth time for IVA's are over. It is simply not viable to do these in large scale now as the cost of acquisition (including drafting and holding meetings) is more than the nominee fee. With more being demanded from Debtors than they realistically can afford, and supervisor's remuneration being capped, is it any wonder that the big operators are scalling back.
Tix may have been very clever in their own eyes in driving down costs and raising contributions, but will they be as smug when there are fewer operators and proposals, making their own existence questionable.

[Adam Davies]

Hi
I would say that abuse of the bankruptcy system is where someone racks up debts with the INTENTION of declaring bankruptcy some years later.I have no experience of this but would guess that it can be open to abuse.
Regards

[ladyc]

I would imagine that happens more in business when things start going wrong than with joe public, Andy.
Maybe it's me , but I can't imagine anyone wanting to go bankrupt.It must be very few and far between that set out to do this.
I think if this awful stigma of advertising the fact is taken away then more people will opt for it but not out of debt avoidance.
Forcing someone to live on a shoestring, probably below the poverty line is unfair.
I am on a DMP and am allowed £40 per month fuel allowance. I live in the middle of nowhere and have to travel to the doctors twice a month which is 12 miles away and the local shop is the same. My family live 50 miles away so this is very restricting.As my DMP runs for many years I will probably not be able to afford to visit my family for the rest of my life.
No allowance for Sky but I have a contract so have to pay. The same with Broadband.
I know I must pay back my creditors and I will but it seems like a punishment to go this far.It's certainly more than a young hooligan would get for creating the equivilant amount in criminal damage.
If you've got young children then an IVA sounds very harsh. Children want to join in things at school and have to have uniforms etc.
If you'd commited an offence and been fined then couldn't afford it the situation would be reviewed.
It's an over the top reaction to force people to suffer like that.
A reasonable amount to live on is not much to ask when you're commited for five years.
Like you are all saying , if they made the allowances a little bit easier all round then most people would not want to go BR whether it's advertised in the paper or not. Five years is a long time.I certainly didn't think I'd be in this situation five years ago.

[Skippy]

I do know of someone (not personally but through a friend) who took out loans, spent the money and never made a payment on them and went BR. They have also given up their job so they won't have to pay into an IPA. They are also spending on a credit card that they didn't declare in their BR petition. They are basically laughing at the system, although I did tell my friend to tell them that they won't be laughing when the OR finds out and hits them with a hefty (and very much deserved in my opinion) BRU.

[ladyc]

Hi Skippy, This person must have been some sort of nut. Why would anyone do that. They may have got a few pounds to spend but in the long term they'll have nothing.
In fact, I would have thought it was some sort of criminal offence to do that.

[Skippy]

If I didn't trust the person who told me, I would have thought that they were making it up! They are convinced that any debts incurred on the credit card post BR will be included in the BR - I did tell my friend to tell them otherwise, but I don't think they are the sort of people who will listen.

They are going to end up in the same situation again - some people never learn.

[Adam Davies]

Hi
I think that if it happens then it is more likely to happen in business rather than personal debts.
I think that we are all agree along the same lines,living in an IVA can seem harsh when compared with bankruptcy.
Will make for a good debt debate on the 2nd May when we discuss Bankruptcy v IVA
Regards