Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

By bode
#258243 What is the likelihood of a credit card company or DCA forcing a bankruptcy order on an individual? As far as I'm aware, this is very seldom, almost non-existent.

A visit to the citizens advice bureau suggested that this was possible. With charges and interest, the debtor has accumulated a debt of £75K with about 15 creditors.
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By TalbotWoods
#258253 It is possible, but it is not that common.

However, Amex and HMRC WILL go for bankruptcy quite routinely, and if you receive a statutory demand, then it is possible they may go ahead with it.

Tim
By bode
#258283 Thanks, the CAB reported that Natwest has bankrupted people. I suppose it depends on the size of the debt?
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By JaneClack
#258413 Natwest are not known for this - however they did seem to be going for charging orders and trying for orders for sale. This is new to us if they have started making people bankrupt and seems an odd thing for a creditor to do as they rarely make any money out of it - HMRC do it to clear their books, Amex would want to see it was worthwhile ie a property with lots of equity. Trade creditors and dissaffected former friends, family members and partners tend to be the others.

It is only worth making someone bankrupt if you are going to get your money back from it is the general rule of thumb for creditors. Insurance obligations for trade creditors and who knows for the latter group.

Think about it - the larger the debt, the less likely the creditor is to get his money back and it costs them more to make you bankrupt than it would cost you to do it - but fees are going up on 1st June.

There are some collection agencies who do threaten this and carry it through but the cases I have seen are when there is - in the jargon - "shedlloads of equity".
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By TalbotWoods
#258473 I think (and I do say this with a bit of baited breath) that some CAB Volunteer and advisers are painting a darker picture than there actually is.

Plus there is an element of adviser being honest and say it 'could' happen' and then the people they are talking to 'hearing' the word 'Will'.

As with any debt the creditor or DCA 'could' but very very few 'will' unless there are 'shed loads of assets' or there is a need to close the case (as in HMRC) or they have 100% insurance (as in Amex)

Tim
By bode
#258763 I visited the CAB with the person in question and this particular visit wasn't very helpful. Presenting the worst scenario in front of an emotionally unstable client isn't really necessary and a little out of order. However in balance, others have been helpful offering real world advice.
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By TalbotWoods
#258773 Unfortunately some CABs are like this, but beleive some others are 100% supportive and helpful.

Did you see the dedicated money advisor or a volunteer?

Tim
By bode
#258873 The orignal money advisor was helpful, the other guy who helped with a financial summary got out of his depth and called the manager in who scared the wits out of the poor woman!