BR adverts to cease!

[ianmillington]

I would agree that for someone to be a debt avoider there has to be, to a significant degree, an element of pre-meditation or mal-intent. The overwhelming majority of debtors do not fit that description, most of them having got themselves into a hole, possibly with some assistance, from which they cannot escape.

The root of the problem is that none of the legislation under which we operate was designed to cope with large numbers of insolvent consumers. Neither the Insolvency Service nor the Insolvency Profession have historically carried the necessary staff numbers to cope with such demand. The most recent legislation (the Enterprise Act 2002) was designed to "promote entrepreneurs" as is the current measure (the rationale is repeated almost word for word in fact). Consumer debtors did not enter into the legislation, although everyone was predicting at that time that it signalled the end of the IVA, particularly the consumer IVA. How wrong we all were!

The fact is that none of the solutions available (Bankruptcy, IVA, DMP) are perfect. Bankruptcy and IVAs have had to be adapted to fit the insolvent consumer. The current measure will, it is true, remove one advantage of an IVA i.e that of privacy. That may have some impact in the short term. We shall see. There is little that any Insolvency Practitioner will be able to do about it, other than to demonstrate a difference in service levels to all parties between the two.

It will be very interesting to see how the banks react if Bankruptcy numbers increase dramatically.

Ian

[MelanieGiles]

Fascinating stuff! I completely concur with Ian's comments above. He and I have been around a long time and we have seen many changes in our profession over the last 20 years or so - including the most recent ones introduced by the Enterprise Act - where even the most leading figures in the industry were predicting "RIP IVA!")

I will believe the proposed changes when I see them - maybe next week in the budget - or more likely as a suggested amendment to legislation which will take some while to introduce, possibly by Act of Parliament. And how long have we been waiting for SIVAs?

As a professional I support all debt solutions, give advice on all debt solutions, and operate all debt solutions. The one thing which is not going away is the fact that unaffordable consumer borrowing is increasing at an alarming rate, the housing and mortgage marketplaces are in bad shape and unemployment is rising. If this is going to encourage entrepreneurs to stride out and take the risk of starting a business in such economic conditions, I think they ought to magic up some other solution.

[lily]

I would just like to say that I knew a very caring and beautiful Head Teacher of a special school. She was in debt and noone knew, she, like us was a 'good risk' given credit as she had, again, like many of us here, never missed a payment. For whatever reason, she kept it to herself, maybe afraid and ashamed of being judged. She left our school and the parents and the school really missed her. She killed herself sometime later, I couldnt quite believe it. I dont think BR would have been an option. I had never experienced debt hell then and didnt understand. She didnt pay her debts back, she didnt teach any more special needs kids either.......

[MelanieGiles]

I don't think that anyone, who has not been in that position Lily, can quite understand the sheer stress that being in debt actually brings - even those of us who work in the profession.

I hate to read stories like the one you have just shared, as an insolvency practitioner you feel that in some small way you have failed that person by not being there. I know that is unrealistic, but I do genuinely feel that everytime I read these accounts.

That is why I have welcomed the publicity surrounding IVAs over the last couple of years, and forums like iva.co.uk, which has brought debt solutions such as IVAs and DMPs to the forefront of peoples minds, and the public are generally far better informed now about their options - and also that bankruptcy is not so bad either.

Sadly for some this has come too late.

[lily]

This was some years ago and I dont know if IVA's existed then. The point I was trying to make is that there should be a way back from debt, I think that it really does not matter what route people take. IVA or BR, the best route for their circumstances is the right choice I guess. Desperate people need to know that there can be life after debt and believe in themselves enough to put the guilty gun down.

[ianmillington]

Thank you for sharing that with us Lily. It reinforces to Mel and I the fact that we are trying in some small way (as are many others here) to help people put their lives back on track. Many years ago as an Insolvency Casehandler I met one of the bankrupts with whom I was dealing. We enjoyed a cordial meeting, got on well, and he said how excited he was to be meeting his wife that evening to attempt a reconciliation. 48 hours later his father rang to tell me he had killed himself. I was horrified and, dare I say, guilt-ridden. Without going into detail the chap's father told me it was nothing to do with me - instead the evening had gone terribly wrong. That incident has permanently affected the manner in which I go about my professional life. It is absolutely vital that all of us who deal with personal debt realise that we deal with peoples lives here, and that with our privileges go social responsibilities.

Things like that and Lily's story do put things into perspective a bit.



ian

[lily]

It must have been horrible for you, the very thought of someone being so positive but still so desperatey unable to overcome the feelings of failure. It must always be remembered though that ones actions is ones responsibity and their choosing, tragic though that is.

I have to confess I was angry with the Head Teacher at the time, I didnt understand, we shared a lot of time, to me she was amazing and had the gift of helping parents of newly diagnosed disabled children 'live' again.

I feel that this site offers a lifeline to many who have got themselves into deep debt water. With thanks to yours and Mels (to name but two experts) input they can realise from very early on they can get through it all.

This place was certainly a life saver for me 18 months ago.

[ladyc]

It's good to know there is people out there who do care. Any debt problems can be eased at the very least on here.
It is the most awful, stressful and shameful time of my life and even knowing others are going through the same helps too.
Sometimes I feel like I'm living this awful secret life as most of my family have no idea of this situation.
Without forums like this it would be a very lonely time indeed.

[lily]

I know its a horrible time, I did fess up to my family eventually. I figured that I would tell them the truth and they can either send me to Coventry or accept it but either way I didnt have to keep making excuses about not going out with them. Well they were very understanding but I still feel a little on the outside of things. They are all going on a cruise next year and talk about it constantly, I wasnt asked and couldnt ever afford it. I dont think anyone can understand unless they have been there, its like living on the outside of life, right???

[ianmillington]

Neither of you have anything to be ashamed about at all.

Ladyc - I gather from earlier posts that you are in a DMP. How is that going? Lily, are you in an IVA? If so, how long to go out of interest?

ian

[bigpete]

Yer tiz: SUPPLEMENTARY REPORTS Enterprise: unlocking the UK's talent*

2.45 The insolvency legislation currently requires insolvency officers to advertise key insolvency events in a newspaper in each and every case. In order to remove unnecessary burdens on creditors of insolvent estates the Government proposes to change the law by the end of 2009 so that insolvency officers have discretion to decide whether or not to place an advertisement in the local press, having regard to the particular circumstances of the case. As virtually all advertisements currently placed appear in local newspapers, this change is likely to lead to a reduction in the perceived level of stigma associated with bankruptcy. Notices will continue to be published in the London, Edinburgh and Belfast Gazettes.

http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/
12_03_08bud08_enterprise_524.pdf

[ladyc]

Hi Ian, Yes I am in a DMP that has been going for a few months now but was scheduledto finish in 2035. I will more than likely be 6ft under by then.
I have gone against everything that has been preached on this forum.
I have been fortunate enough to have been given some money from my sister to pay some of my debts as I had helped her out some years ago she wanted to return the favour.
I offered MBNA a F&F for two of my debts. They took 40% for a short settlement. I also paid Barclays my overdraft at 66%.
I did not have the money to offer all and I feel relief that I have fot rid of a quarter of my debtors.
I asked payplan before I did it and they said it was ok and let them know if they accept and they'll redistribute my payment. I did this, so now my other creditors are getting a bit more each month and my end date has dropped by five years.
This has spurred me on. I have been selling everything I've got on Ebay. I've sold clothes , handbags, shoes, tools , old motorbike bits and so on.
I am trying to raise some money to pay another small creditor off. Is this ok do you think?
My sister is going to give me a bit more money soon so hopefully I can loose a couple more and live to pay the others.
My sister is the only relative that knows my predicament.My worse fear is dying and my children finding all this mess.
I did offer Egg the money initially as they are my biggest creditor. I got no reply so I rang them and they said they wanted all the information and proof that you would have to give in an IVA.
I wouldn't have minded that but she also said she wanted a letter from my doctor with the prognosis. There is no way I'm going to tell my doctor of my situation, plus I will be a pensioner in just over a year so I think that speaks for itself. I just left it and never heard any more.
Will I be in trouble for what I'm doing. I'm just trying to do what I can for myself and pay what I can.

[ianmillington]

I can't see you'll be in trouble for what you are doing - you have amply demonstrated that you are totally up against it and that you are desperately trying to get people paid.

I am very, very, concerned Ladyc that you will retire next year with no end to your debt problem in sight. You've probably said somewhere else so forgive me but how much do you now owe and how much are you paying each month via the DMP?

Thanks

Ian

[ladyc]

Hi again Ian. I pay £254 per month. I now owe £68000. I cannot get an IVA because I, unfortunately became disabled and had to be given medical retirement from work. I get 1/3 occ pension, 1/3 Incapacity Benefit and 1/3 DLA. So the majority is benefits. Plus after reading what I have on here , an IVA scares the life out of me.
I own my home that has a small amount of equity in it. It is a bungalow that was purchased purposely because of my condition so I don't want to move.
I don't see any other way than what I'm doing. The creditors are probably going to end up with much more than other ways but that's fine. I'd prefer to win the lottery and pay them it all.

[ianmillington]

A DMP would run for 22 years even with a full interest freeze. That cannot be in your interest I am afraid.

Quite ironically, your case would appear to now be covered by the protocol. If you attempted an IVA you would probably only pay about 15-17p in the £. However, depending upon who your creditors are, you might just get it approved. You lose nothing in asking Payplan to consider looking at doing an IVA for you. If there is only a small amount of equity in your bungalow, say your mortgage exceeds 85% of its value, then under the new protocol you wouldn't have to introduce any more. Clearly I can see why you would not want a bankruptcy because of the bungalow.

I'm not saying that an IVA would be approved. However, it is definitely worth you plucking up the courage to look into it as a Bank robber wouldn't get 22 years.

Ian