Effects of Bankruptcy

[abc123def]

I watched rip off britain last night and was surprised to hear that insurance companies credit check you when they provide quotes for insurance for cars and other things.

 

They quote you according to your credit check,

someone bankrupt or who is in any kind of financial agreement with creditors will pay more for their car insurance.

 

Reason given, they are only left with a set amount of money to live on (the rest is taken for the OR or creditors)

leaving little or no extras for non essentials like servicing your car and car maintenance

and are more likely to just have the MOT done with no service etc so are more likely to have an accident due to poorly maintained cars.

 

I hadn't really prepared myself for this and wonder what the effect will be when my insurance is due to renewal in September. Anyone else aware of this?

[Wintry]

I watched rip off britain last night and was surprised to hear that insurance companies credit check you when they provide quotes for insurance for cars and other things.

 

They quote you according to your credit check,

someone bankrupt or who is in any kind of financial agreement with creditors will pay more for their car insurance.

 

Reason given, they are only left with a set amount of money to live on (the rest is taken for the OR or creditors)

leaving little or no extras for non essentials like servicing your car and car maintenance

and are more likely to just have the MOT done with no service etc so are more likely to have an accident due to poorly maintained cars.

 

I hadn't really prepared myself for this and wonder what the effect will be when my insurance is due to renewal in September. Anyone else aware of this?

 

Hi abc

 

Thanks for posting this

 

You make some valid points and highlight what is likely to become the next hot potato as far as debt advice is concerned (it already is really, its just seems to be being kept a little quiet, but this cannot last and they know it)

 

When people enter a debt solution be it formal or informal then they should be able to manage to pay their priorities and essentials and where children are involved they have a right to certain standard of life and enjoyment (maybe even a holiday) and not penalised due to their parents unfortunate financial problems (Child benefit & Child Tax Credits are paid where the kids are concerned you know)

 

The cost of living including food, utilities is rising, with another major factor being travel and motoring costs.

 

People working all hours, having to run older cars for essential employment purposes, with older vehicles comes less effeciency, probably more repairs etc, increasing the costs, pressure & stress.

 

People losing their jobs, pay freezes & cuts, benefit & tax credit cuts, yes these are all to real now with more to come, as no doubt some of you reading this will already know.

 

Disposable income being squeezed or wiped out, it was predicted and now becoming a reality for many.

 

Household items wearing out and breaking down, for example cookers, washing machines, boilers & heating systems etc, home maintenance.

 

It can basically become a creeping pincer movement, slowly but surely squeezing the finances, trapping people in an impossible situation, getting further into debt with priorities while trying to pay Debt Management Plans, IVAs and even Income Payment Agreemenys & Orders in bankruptcy, yes it is happening and its going to get worse.

 

The problem is if a debt advice company or a 'charity' who have a financial interest in the outcome or continuation of a debt solution, especially where payments are concerned, then what do they do, the right thing hopefully!

 

Then there are the somewhat contentious HES guideline figures used by the Official Receiver in bankruptcy that are different to the Common Financial Statement (CFS) etc.

 

http://www.cfs.moneyadvicetrust.org/

 

The O/R were seriously challenged on the HES figures and the Common Financial Statement by a prominent CAB at an IPO hearing held at a well known East Midlands County Court earlier this year with the outcome quite interesting indeed (everybody held their breath that day so to speak and it is far from over)

 

We all know what the OFT guidelines say on the Common Financial Statement with regard to debt collection (as clearly promoted by certain agencies in their business plans etc).

 

http://www.oft.gov.uk/about-the-oft/legal-powers/legal/cca/debt-collection

 

People doing their best to address their debts deserve all the help they can get with easier and smoother flexiblity built in with payment arrangements if needed, be it a formal or informal solution.

 

It is total false economy to have people still struggling and getting behind with mortgages, rents, council tax, CSA etc with health and relationships suffering and even more frightening if safety starts to be compromised.

 

The economic situation is on a downer, we all know, people need help to get them through this.

 

Tricky for some agencies maybe, what do they do is a good question?

 

You see there is the age old saying of "you cant run with the hare and hounds"

 

Time for genuine independent impartial advice I say:)

 

Very interesting times ahead.

 

My opinions, and anybody welcome to comment or discuss.

Edited June 2, 2012 by Wintry

[username44]

I was discharged in 2009. I was worried about this too and have to say that I haven't noticed any particular increase in my insurance, house or car.

BR is not an easy option but if that's the only option, then that's the only option. If the OR agrees that you need use of a car for work, childcare or caring responsibilities then the insurance amount will be treated as a necessity and allowances will be made for it.

 

If you need to do it, then do it as soon as you can. The longer you put it off, the longer it is until you are free of it.

 

Good luck : )

[Wintry]

I was discharged in 2009. I was worried about this too and have to say that I haven't noticed any particular increase in my insurance, house or car.

BR is not an easy option but if that's the only option, then that's the only option. If the OR agrees that you need use of a car for work, childcare or caring responsibilities then the insurance amount will be treated as a necessity and allowances will be made for it.

 

If you need to do it, then do it as soon as you can. The longer you put it off, the longer it is until you are free of it.

 

Good luck : )

 

Hi

 

Thank you for posting this.

 

The bottom line really is this.....

 

These are unprecidented economic times, some of the profit makers, the fair share donation outfits (whatever that means), DMP income generation agencies (again whatever that means) are in danger of becoming out of touch and cannot be seriously considered as genuinely independent & impartial.

 

People and families in debt have a right to proper independent impartial advice and assistance.

 

Anything less is a fake and perhaps much worse.

 

My opinions only and once again feel free to join the debate.

Edited June 3, 2012 by Wintry

[username44]

Hi Wintry

 

I agree about the dmp companies out there. As far as I could figure out when looking at my options in 2008, the vast majority of them were low level parasites wanting to make a quick buck on the vulnerabilities of people in debt. I looked at all the options, IVA's and debt management plans and made an informed decision that short term and long term in my situation, bankruptcy was the best option for me. I was lucky in that I had some understanding in this area and feel for any novice trying to get genuine advice from IVA or DMP companies.

Even CAB who are always recommended and hold a position of trust in our society were not helpful or knowledgeable.

[assisted blonde]

My husband went bankrupt about 6/7 years ago, automatic discharge after a year and we didnt notice any major changes to insurance etc, also in the last 3 years he has had credit offered from banks/credit cards etc with no problems, all main lenders no sub prime, so it really hasnt caused any problems except for the first year when he didnt obviously have any credit, although he did get his name put onto my bank account with no problems.

[abc123def]

My experience with CAB was variable. They could make a debt management plan but knew nothing about bankruptcy and couldn't advise me on whether to or not. I had to find that elsewhere. While for many a debt management plan works in that you can suddenly manage for money and the creditors calm down at least for a while, really it would be useful for CAB advisors to have knowledge of BR so they could know when BR or other formal measures are actually the better option for people. I spoke to an Insolvency practitioner for some free advice and he expressed annoyance at CAB's who start up debt management plans when that clearly isn't an option for a person like me for example. That said I have had severe depression and needed to be in a better place before going through it so the time wasn't right for me anyway until now.

[debtinfo]

My experience with CAB was variable. They could make a debt management plan but knew nothing about bankruptcy and couldn't advise me on whether to or not. I had to find that elsewhere. While for many a debt management plan works in that you can suddenly manage for money and the creditors calm down at least for a while, really it would be useful for CAB advisors to have knowledge of BR so they could know when BR or other formal measures are actually the better option for people. I spoke to an Insolvency practitioner for some free advice and he expressed annoyance at CAB's who start up debt management plans when that clearly isn't an option for a person like me for example. That said I have had severe depression and needed to be in a better place before going through it so the time wasn't right for me anyway until now.

 

To be fair to the CAB, they are run on a tight budget, you will often find that there will be one person or a small group in each CAB that specialise in bankruptcy and that they cant see everyone straight away, this means you often see someone with lower expertise first and if necessary speak to the specialist later when they can fit you in.

 

DMP's are easy to setup and so this is why people often get put on them first, Often people need an immediate restbite whilst they prepare for a more formal and final solution and again DMP;s are good for that, like you say you needed some time to come to terms with going bankrupt. Generally DMP's dont pay of the whole debt and provide a final solution, they are more for putting you in a holding pattern either for another solution of to see if short term difficulties (such as a lost job) are overcome.

[abc123def]

No one in my local CAB had any knowledge of BR, they did give me the phone number of an Insolvency practictioner who while being independent and fee paying for businesses does provide free telephone or email advice to people which was helpful. But I do live in the sticks so my local CAB is small I guess. Yes a DMP did the job for the length of time I needed it.

[Wintry]

Hi Wintry

 

I agree about the dmp companies out there. As far as I could figure out when looking at my options in 2008, the vast majority of them were low level parasites wanting to make a quick buck on the vulnerabilities of people in debt. I looked at all the options, IVA's and debt management plans and made an informed decision that short term and long term in my situation, bankruptcy was the best option for me. I was lucky in that I had some understanding in this area and feel for any novice trying to get genuine advice from IVA or DMP companies.

Even CAB who are always recommended and hold a position of trust in our society were not helpful or knowledgeable.

 

Hi

 

Thanks for the interesting reply, some good points

 

Getting it right at the outset is the key, not always that easy sometimes.

 

Unfortunately a few negative posts on the CAB service in this thread, but fair though Im afraid, yes fair enough, not going to argue.

[toddle2u]

DMP's are easy to setup and so this is why people often get put on them first, Often people need an immediate restbite whilst they prepare for a more formal and final solution and again DMP;s are good for that, like you say you needed some time to come to terms with going bankrupt. Generally DMP's dont pay of the whole debt and provide a final solution, they are more for putting you in a holding pattern either for another solution of to see if short term difficulties (such as a lost job) are overcome.

 

I agree with this totally - DMP's aren't really a long term solution but they do buy people time to explore other options. I beleive I have come across a few ethical DMP companies and IP's who admittedly are in it to make money but do act and advise in the best interests of the debtor. Unfortunately they are few and far between and the industry needs far more regulation (DMP's not IP's who are already highly regulated). I think these tough times people are experiencing at present are not going to get any better any time soon and in fact think they are going to get a whole lot worse so access to good impartial advice is going to become more essential as time passes

[Wintry]

I agree with this totally - DMP's aren't really a long term solution but they do buy people time to explore other options. I beleive I have come across a few ethical DMP companies and IP's who admittedly are in it to make money but do act and advise in the best interests of the debtor. Unfortunately they are few and far between and the industry needs far more regulation (DMP's not IP's who are already highly regulated). I think these tough times people are experiencing at present are not going to get any better any time soon and in fact think they are going to get a whole lot worse so access to good impartial advice is going to become more essential as time passes

 

Hi

 

Yes, I more or less agree with this, good posts

 

Just to add that there are occasions when a Debt Management Plan can be the right solution and indeed the only sensible solution at the time.

 

I know it has been said many times before but creditors & silly collection agencies have to play their full part with unrealistic demands, the freezing of interest and charges when people are genuinely doing their best, even more so now and in the future given the situation facing the economy.

 

So must the companies & agencies who are supposed to be independently helping people, the problem comes of course is when a company or agency is geared business & financially wise to Debt Management Plans & IVAs.

 

Disposable income is being and will continue to be squeezed further and in some cases wiped out and going further into a minus with the effects already clearly being felt.

 

Something will clearly have to give or change soon as the sheer number of people struggling in payment arrangements will eventually burst the sloosh gates wide open with some companies and agencies totally exposed to the oncoming deluge.

 

Realistic & sustainable expenditure allowances, ongoing support, more flexibility for essentials & repairs etc are needed and not figures made to fit solutions and perhaps a tendancy to keep people in them rather than facing the obvious situation that cannot go on.

 

If we are not careful, before long, you wont be able to get a fag paper between certain Debt Management Plan providers and the Debt Collection Agencies, Im afriad they have got themselves in a bit of a twaddle, maybe to some extent, hung themselves even.

 

You see they have taken their eye off the ball and the unstoppable dire economic tide has flooded in behind them basically cutting them off from the land (and perhaps reality) without a boat or paddle (a truly fascinating situation is developing)

 

I am of the opinion that the time will come where, if appropriate, more & more people will consider managing their own Debt Management Plans, after all the OFT guidelines clearly say that they should be treated the same, also its a better deal for the creditors and we all know where their interests lie.

 

As I have said before simple economics will determine the issues in the long run and the sands do shift from time to time in debt advice, some are predicting that they may be about to again.

 

The biggest irony here, is that basically it is the unique economic situation that has, in some cases, snookered both people in debt and the advice providers.

 

Even more worrying, is if this situation goes on unchecked, then unfortunately, the light at the end of tunnel for some of those in debt will start to seem like nothing more than a flickering candle in the distance.

 

Interesting times and keep watching this space.

 

My opinions based on experience

Edited June 7, 2012 by Wintry

[abc123def]

That is the thing that made me choose BR. My debt was very high and I was scared that when I got a job decades would go by without a single penny to spare, that if the car or washing machine failed I would have to do without rather than repair (where in the debt plans are savings for such things????) and without those I would not manage. In the end BR was the only option for me as I could not live with the stress and worry for decades, my mental health just isn't up to it. This way I will have a stressful year then hopefully I can start to recover and rebuild.

[Wintry]

Hi

 

Average take home incomes drop by 3.1% in the 2010/11 period according to BBC article

 

http://www.bbc.co.uk/news/business-18447386

 

Probably worse to come for 2011/12 and beyond?

 

Disposable incomes suddenly taking a rapid vertical hike?

 

People really starting to feel the pinch

 

Something has to give and they know it.

 

True impartiality is likely to be severely tested here, a fascinating situation is well and truly developing

 

A little bird tells me today that panic may well be about to break out.

 

As always my opinions:)

Edited June 14, 2012 by Wintry

[sequenci]

Hi

I was looking around as you do, and found this.

From what I have read on here the DMC's CCCS and payplan very often make the finances much too tight. I have a theory why that is, but it may not be popular so I will not say. Very interseting read though

 

The sooner they start using the common financial statement the better (for their DMPs).

 

What I would really like to see in England and Wales is a scheme akin to the Debt Arrangement Scheme in Scotland, it's excellent and would solve so many problems.

[Wintry]

The sooner they start using the common financial statement the better (for their DMPs).

 

What I would really like to see in England and Wales is a scheme akin to the Debt Arrangement Scheme in Scotland, it's excellent and would solve so many problems.

 

Hi sequenci

 

Me thinks you are wise to the situation:)

 

Is it too late though as online backed by advisers is the word (sure you know what I am talking about)

 

Big difference in the figures too, have you thought of the all round implications?

 

The sands could very well be shifting.

[sequenci]

Is it too late though as online backed by advisers is the word (sure you know what I am talking about)

 

Sure do

[Wintry]

Sure do

 

Hi

 

I think you got the potential picture a while ago:)

 

Also name and shame the creditors that dont follow the OFT guidelines (possibly put up the creditor / collection agency refusal letters etc with the debtors name & details blacked out) is one idea I heard mentioned.

 

Could be huge sequenci

Edited June 14, 2012 by Wintry

[sequenci]

Hi

 

I think you got the potential picture a while ago:)

 

Also name and shame the creditors that dont follow the OFT guidelines (possibly put up the creditor / collection agency refusal letters etc with the debtors name & details blacked out) is one idea I heard mentioned.

 

Could be huge sequenci

 

It would probably be quicker to create a list of those that do. I'll let you know when I come across someone.

[Wintry]

I am not sure what you are on about , but I have heard of so many companies especially PDL's not dealing as per oft guidelines

They make you default before setting up a plan

They will not deal with a paid for/free/non debt management plans

They want to take payments by credit cards...how can that be not borrowing to pay a debt, expressly against OFT guidelines Iqor is one of them and I can prove that with a letter I have

 

Hi

 

Complaints & more complaints to the OFT etc, see what they are made of!

 

The OFT are inching their way there.

 

The other stuff will maybe hit the screens in the coming weeks, its all behind the scenes at the moment, but its definitely there, Ive seen it.

[Wintry]

It would probably be quicker to create a list of those that do. I'll let you know when I come across someone.

 

Hi

 

You are probably right again:)

[eddiemc]

This country treats bankrupts worse than child molesters.

[Stigman]

This country treats bankrupts worse than child molesters.

 

Hi,

 

If you or someone you know are having issues relating to their Bankruptcy, can you please post up remembering to remove any personal identifiers for yours/theirs personal confidentiality.

 

Stigman

[eddiemc]

Hi,

 

If you or someone you know are having issues relating to their Bankruptcy, can you please post up remembering to remove any personal identifiers for yours/theirs personal confidentiality.

 

Stigman

 

 

I may have posted this before but being a general insurance broker and a discharged bankrupt I have felt the full force of discrimination by the powers that be in this country. This being the FSA who has it's strings pulled by their masters at the treasury.

 

I was made bankrupt over a simple matter in respect of some money it was alleged I owed. I had just lost my job and couldn't pay the full amount back and my offer of payment was refused. This was in 2006, I lost my house and nearly lost my family. However this doesn't seem to be enough to punish me, as a result of my small indiscretion I have not been able to secure a position in the industry I have worked in for over 25 years. I have had to scratch out a living doing various things mainly under the FSA radar. The FSA will not confirm if they are prepared to licence me again without going through a long winded application and passing over £1,500. If they decide not to grant me a licence which I suspect will be the case they get to keep my £1,500. Hows that for treating customers fairly.

 

Has anyone else had this sort of experience?

[Wintry]

I may have posted this before but being a general insurance broker and a discharged bankrupt I have felt the full force of discrimination by the powers that be in this country. This being the FSA who has it's strings pulled by their masters at the treasury.

 

I was made bankrupt over a simple matter in respect of some money it was alleged I owed. I had just lost my job and couldn't pay the full amount back and my offer of payment was refused. This was in 2006, I lost my house and nearly lost my family. However this doesn't seem to be enough to punish me, as a result of my small indiscretion I have not been able to secure a position in the industry I have worked in for over 25 years. I have had to scratch out a living doing various things mainly under the FSA radar. The FSA will not confirm if they are prepared to licence me again without going through a long winded application and passing over £1,500. If they decide not to grant me a licence which I suspect will be the case they get to keep my £1,500. Hows that for treating customers fairly.

 

Has anyone else had this sort of experience?

 

Hi

 

Thanks for sharing this.

 

Interesting and does not sound good at all for you.

 

Cant help you on this one Im afraid