Now My Personal Bankruptcy: A Welcome Experience

Credit collection ceases the moment bankruptcy is granted.

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Debt can be an impossible weight to carry.  Photo Credit identifytheft.comBailiffs can't do this YET but they seek new powers as you read.Howard Brown suggests Halifax is the bank to manage our money.  he doesn't remind us of the 39 penalty for a returned cheque!Here, their flunkey suggests Halifax is the first step to owning the world...perhaps he meant OWING the world?Don't worry about cutting up your plastic:  The Official Receiver insists and does it for you!!
Debt can be an impossible weight to carry.  Photo Credit identifytheft.com
Debt can be an impossible weight to carry. Photo Credit identifytheft.com
Bailiffs can't do this YET but they seek new powers as you read.
Bailiffs can't do this YET but they seek new powers as you read.
Howard Brown suggests Halifax is the bank to manage our money.  he doesn't remind us of the 39 penalty for a returned cheque!
Howard Brown suggests Halifax is the bank to manage our money. he doesn't remind us of the 39 penalty for a returned cheque!
Here, their flunkey suggests Halifax is the first step to owning the world...perhaps he meant OWING the world?
Here, their flunkey suggests Halifax is the first step to owning the world...perhaps he meant OWING the world?
Don't worry about cutting up your plastic:  The Official Receiver insists and does it for you!!
Don't worry about cutting up your plastic: The Official Receiver insists and does it for you!!

I Went Bankrupt, Gave the Baliff the Victory Sign and I'm Glad I did!

Bankruptcy: My Own Story

When I was a young man, someone going bankrupt took on the aura of a poor slob with a communicable disease. Thanks to establishment spin, Insolvent people were shunned by society in general and seen as some sort of wasters, or even criminals. I mean, how could you treat the establishment in this way, to go to court in order to get out of paying your debts? You cad, sir! Even before this epoch, there was no relief for the financially challenged except the workhouse. Charles Dickens vividly writes about these times, and had problems with debts himself.

In 2009, and even more so in 2010, bankruptcy has become much more respectable. In fact, it’s the creditors themselves, such as the banks, who are hanging their heads in shame having forced thousands into penury with draconian bank charges, or even written-off their customer’s savings by going under themselves. As far as paying credit card and personal loan debts to banks who have behaved in this way, people in trouble making the payments often consider bankruptcy as the first line of relief, not the last, as was once the case. Not only does bankruptcy end their current struggle to pay, it stops the bailiff in his tracks. And the sonorous warnings from the financial institutions and the courts, et al, that you won’t be able to get credit for 6 years after being discharged; hey, who needs that either with the sky-high interest charges and the courts having decided the banks may not have to pay back the billions they have “stolen” already.

I tried other avenues before I decided to take the irrevocable step of declaring myself insolvent in the eyes of friends, family - and the world - as the order will be published in a local paper; along with, depending on your celebrity status, a story on your life and downfall.

I had battled along as many do, paying a bit here and a bit there to the roughly 15 creditors I had; they, in turn, had variously threatened me with legal action; made rude calls to me house, and, the final indignity, promised to send the bailiff to clear out my home. The phone calls, some verging on abusive, were constant. All these companies employ credit staff trained to do just what these fleas were doing, roust the victims enough that they would do anything - even borrow more money and pay-up - to get them off their backs.

I will say at this stage, if I had been living alone, I would have probably muddled along as I was: paying £2 here, £3 there: some of the creditors - particularly Capital One Charge Card - were sympathetic and prepared to let me pay the roughly £3000 I owed them the best way I could. Just as long as some money was coming in regularly. Despite high interest rates, I recommend this credit provider to people looking for a credit card. And the truth was, they would all have had to accept these tiny amounts, even if I would take 20 years or more to pay, as I had nothing that would interest them or the bailiffs if it came down to it; nothing of value they could take and sell

But I wasn’t alone. And I couldn’t take the risk of bailiffs coming to my address and hassling my friend, or attempting to get into my furnished lodgings and perhaps removing something that was not mine, or even taking personal objects with no monetary value, in order to persuade me to somehow come up with the money. In fact, I would have quite enjoyed giving these court appointed swine the double-fingered salute and telling them to help themselves to my personal odds and ends. Might it have done them, and their philistine clients much good! Note here that unless they can get in to your premises, they are helpless!

Anyway, I saw that I would have to declare bankruptcy on a voluntary basis, before the creditors themselves decided to take the initiative and make me bankrupt out of revenge, or call in the hounds for the same reason. First, though, and I pray you are reading this, I nipped over to Mexico for a quick holiday in the sun in Baja California, drawing out what funds I could from my card accounts in order to weather the storm ahead. (Make a note of that, might as well get hung for a sheep!).

Hertford County Court staff were as nice as nice can be about my application. I had filled in a Statement of Affairs I downloaded off the internet from the government Insolvency Service and paid my £360, I think it was, fee to the Official Receiver who would be taking my case, (It’s nearer £500 now). I appeared in front of the magistrate about two weeks later, who asked my how I managed to get so much credit card debt. I mumbled some excuse which obviously bored him as he stamped my application without further ado or questions. There are thought to be more than 150,000 people who will declare personal bankruptcy in the UK this year,(2009 there were 120,000 or so in 2008). And this figure doesn’t even include companies - such a General Motors! - which have declared bankruptcy over the last two years..

You will have an interview with a provisional Receiver at the court, after the courts have “approved” your petition, then there is a waiting period while the OR looks into your assets and debts (which you have already listed). He tries to find out if you are hiding anything that you should have declared as an asset, or even if you have concealed any outstanding debts, because you are not allowed to pay some and not others (such as trying to retain your favourite credit card, although many do this I have heard). Mostly, OR's won't get off their fat asses and do anything and are only interested in their fees..

Then more time elapses as you wait to be discharged. In the case of simple bankruptcies like mine, this period is a matter of months (mine was only six). But if the bankruptcy is complex and involves a lot of money, etc., it can take several years. Once the judge in County or High court stamps your petition, all credit collection action ceases, including door knocking or worse from bailiffs. If they do call, you have the right to tell them to get stuffed.

Once you get your certificate of discharge from the OR, you should contact this other mendacious riffraff, the credit checking agencies, such as Experian, etc., and make sure they show you on their records as having been discharged. They will often ask for a copy (or the original) of your discharge. Then you are free from all the worry and hassles and can get on with your life without all those bloody pieces of plastic.

I worked out that the fees, fines and charges, etc., equalled 1/3 of the amount I declared in my bankruptcy! The banks and their ilk don’t stop adding these crazy penalties, even when you are well in trouble and unable to make the payments.

There is another alternative to doing what I attempted to do: pay in dribs or drabs, or finally going bankrupt. This is to call on one of these agencies who take over management of your debts and arrange payments you can “afford” to your creditors. As far as I can see, they are part and parcel of the same problem. They charge a hefty commission in most cases, and, blatantly, refuse to take you on unless you owe a lot of money. Their interest in you begins if you have debts around £12,000 or more; then they know their cut will be big enough to manage your account. Stinks, doesn’t it? But it may suit some people.

If anyone asked me to describe the first ten years of the Third Millennium, I think it could well be called “The Age of Shamelessness,” or perhaps The “Age of Greed.” The institutions we have grown up with, expecting to trust, the banks, have gambled and lost billions of our money. Then they continues to reward failure by still paying huge bonuses to senior staff, despite that they, or their fellows, have survived due to an injection of billions from the public purse. The Mayor of London, the rumpled and arrogant Boris Johnson, labelled the nearly £200,000 he makes on the side as “Chickenfeed.” Footballers pocket millions in salary and more in payments for advertising or writing books. The government MP’s get caught with their slimy hands in the cookie jar and then hold meetings in the Commons to decide how much their salaries should be raised to cover the “shortfall” by the loss of their padded expenses.

Meanwhile, the gap between the have’s and have-not’s is larger than ever. Our state pensioners, some 3 million souls, are living on about £12,000 a year, less than one weeks’ wages to a top footballer.

So I suggest you don’t take any crap from these financial institutions who are now your creditors: if you were unwise, they were worse; if you are a few thousand in debt and can’t pay, they did the same with billions in many cases. If bankruptcy is a way out for you and your family, have no shame in using the courts to seek relief. I did, and it was right for me.

Tip: The OR will ask you to send him all your credit cards, snipped in pieces. I did this, but friends have said it's wise to keep one card back and pay it off as you may need one for renting cars or reserving hotels, etc. I wish I had done this, they can only ask for it if they find out.

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Comments 21 comments

Sheila 6 years ago

Having just decided, today, to declare bankruptcy, I've been cruising the net looking for accounts of personal experiences, such as this one. While I've definitely rationalized the whole business of having accrued so much debt (the credit card companies made it SO easy; I was making so much money for so long, selling real estate - then the market crashed, after that the entire economy went down the tubes - I'm one of many, in good company, etc., etc., But, infact, I'm still deeply ashamed that I never managed my financial affairs better than I did, and am truly bracing myself for the public humiliation. Still, the ongoing sleepless nights, wondering HOW I'm ever going to pay these endless credit card bills will probably kill me! I'm doing it so if I DO die, my children won't have to cope with the mess of the aftermath.


diogenes profile image

diogenes 6 years ago from UK and Mexico Author

Hi Sheila: Feel no shame! Life's only a game anyway. Look at what these banks have done themselves. I realize two wrongs don't make a right, but their machinizations are the reason the economy nose-dived and put every one in this position. You will realise how much credit was a big part of your life and how life is purer without it..Good luck, Bob


diogenes profile image

diogenes 6 years ago from UK and Mexico Author

Hi Sheila: Feel no shame! Life's only a game anyway. Look at what these banks have done themselves. I realize two wrongs don't make a right, but their machinizations are the reason the economy nose-dived and put every one in this position. You will realise how much credit was a big part of your life and how life is purer without it..Good luck, Bob


Going2Oahu profile image

Going2Oahu 6 years ago from Honolulu, Hawaii

Wanted to warn your readers to beware of preapproved card offers. The interest rates on these types of cards can be unusually high, along with large late fees, monthly maintenance costs, and annual fees.


sheila 6 years ago

Diogenes - thanks for the advice. In the three months since I first posted, I STILL have not actually filed, though I'm down to my last $15,000 now, and realize I can't stave off the inevitablity much longer. I stopped paying my creditors last November, though have since negotiated lesser payments and decreased finance charges with some of them. The trouble is, mine is a commission based business, and I'm simply generating no income. I've used every resource available to me, the equity credit line in my house, my retirements funds (of which, this $15,000 is the last)- I stopped paying for health insurance in January, and have made my last mortgage payment, to boot. Though my home, in Florida, is exempt and cannot be taken in a bankruptcy, I simply can't afford to pay for it, any longer - so I'm looking at a major life change. You're right, it IS liberating - even just making the decision. I'm thinking of keeping a blog of the entire process. I know I'd love to be able to tap into something like that. Best, SHEILA


diogenes profile image

diogenes 6 years ago from UK and Mexico Author

I just read your last post, Sheila. I wonder what you eventually did? Of course, you had to protect any real and valuable property you had by hiding what you could, etc. I wish you well in any event...Bob


James WT 5 years ago

I’m due to the court next week to go Bankrupt and although at first I would have avoided it at every cost, now I’m really looking forward to it (may sound strange) I soon will be able to breathe again and not have my heart go everytime the phone rings or someone knocks on the door. The banks and even Governments are given second chances so why shouldn't we? Looking forward to starting fresh!


diogenes profile image

diogenes 5 years ago from UK and Mexico Author

Hi James: I never regretted taking this course for one minute. As much as freeing myself from debt, I was happy to extend the middle finger to the swine who helped cause it: the banks, etc. I was only bankrupt for less than a year; now, two years up the road, i have modest credit again and it has not harmed me...Bob


Peter 4 years ago

Wow it seems it's ok to run up a list of debts and then walk...no run away from the responsibility of paying them! That's what the people in the US Toxic Loans scam did and that's clearly what you've done. I love the way you try to rationalise it by blaming the banks...I can't stand them either...but they didn't hold a gun to your head to create the debt in the first place mate...you shold be ashamed of yourself. Stand up and do the right thing and pay off the people you owe money too.


diogenes profile image

diogenes 4 years ago from UK and Mexico Author

Shame I have none, sorry to disappoint you Petey. When I was trying to keep on paying, they kept adding their draconian interest; in the end, i gave up.

But thanks for your visit and comment.

Bob


stars439 profile image

stars439 4 years ago from Louisiana, The Magnolia and Pelican State.

Great hub. I am glad it all worked out well for you. A lot of miserable stuff happened in our lives. My mother was dying, and my wife, and I have a daughter that can not walk. Our house trailer was more like a small hospital. The hospitals took three hundred thousand of my dead daddy's VA insurance , that mom was getting threw my dead father. She had heart surgery, and got Alzeimers. We were taking care of dying mom, and crippled daughter. Bank people in Lincoln Town cars studied our land and property.

My lawyer helped. When mom died, the land , and our two homes were protected by bankruptcies. Low lifes from every crack, and crevice tried to pick at our bones. I tried real hard not to go bankrupt. Weeped while I worked for five years with a mountain of debt on our shoulders. Bills four inches thick in a binder.

We managed to keep our land, and junky mobile home. Judge mentioned one of our cars. My wife Joann stood up , and said, " Sorry you can't have it. We need it to take our crippled child to clinics." Judge said " OH ! ALRIGHT ! " My wife can be tough when she wants too. Thinking about putting her in and arm wrestling contest for big bucks. She has arms like a Marine Sergeant.

Well we lived appily ever after with no more debt for a while. Yes we have a little debt again. And I think I went bankrupt seven, or eight years ago. No regrets in the slightest. God Bless You.


diogenes profile image

diogenes 4 years ago from UK and Mexico Author

Star: I just read your profile and decided to follow you. You are an outstanding hubber and I am in awe of how you have managed your life despite all the slings and arrows fate has thrown your way.

These bloody banks and their ilk have to learn there is a limit to what we will take without fighting back. I have never regretted for an instant my decision

Bob


chris 4 years ago

I wondered if I do not declare a bank account if the OR can find it ?


diogenes profile image

diogenes 4 years ago from UK and Mexico Author

If you're bankruptcy is small they wont investigate much

Bob


former insolvency case worker 4 years ago

Do becareful people of hiding and not disclosing assets anything that is worth of any monies including any undisclosed accounts with lots of monies in or recently transffered out. When this is found out and usually it is you may be served with what is known as bankruptcy restriction order followed with statement of facts for any criinal wrong doing reffered to police or other enforcing bodies - and you could find yourself going through proceedings well after your discharge date.

Best thing is be honest and upfront with the receiver's office as they will try and help when they can. If your found to be sneaky or hiding assets or trying to borrow more credit as someone commented above your looking at possble offence.


diogenes profile image

diogenes 4 years ago from UK and Mexico Author

FICW: Huh? Thanks for the advice.

Bob


TravelAbout profile image

TravelAbout 4 years ago from United States

Bob

Just ran across your Hub. I, as a writer above, was also in the new construction industry and watched as my income and any job possibilities left for the south pole. I am also in BK but also have been in litigation for over a year with Bank of America over my house. I have been doing research during that period and it is astonishing as well as sickening to what transpired by way of pure greed on the part of the banks, wall street and Fannie Mae/Freddie Mac. What a gig they had, and to this day, still have going while our economy falls down around our ankles. I recently wrote hub as I feel there are not enough people who understand that they have been robbed or potentially can be robbed of their retirement accounts in addition to paying for bailouts by these thieves. I will continue to write hubs on this topic in hopes that even one person will do some research and understand what has really gone on. Here is my hub and I hope more people get interested in what is really happening. http://hubpages.com/living/The-Downfall-of-the-Rea...


Au fait profile image

Au fait 4 years ago from North Texas

Bankruptcy used to be fairly simple here in the states, but in 2005 major changes were made by our illustrious Congress making bankruptcy far more difficult for both businesses and individuals than it was for the last 30 years or more. Chapter 7 is extremely difficult -- where all debts are forgiven or discharged. Very hard to qualify for that anymore. Chapter 13 requires a portion of the debts to be repaid.

Given how many businesses go bankrupt all the time, and given that the great bank heist of 2008 took 17 TRILLION dollars from people and taxpayers, I think no person should feel ashamed if bankruptcy is their last resort and they can do nothing else. Most individuals go bankrupt because of a major event in their lives such as sickness, injury, or accident to themselves or a family member. Of course in the last few years job loss should be a valid reason also.

Very good hub, Bobby! Voting it useful and giving you another awesome!


Mary 3 years ago

I must warn whoever is considering filing bankruptcy to consult a bankruptcy attorney long before the fact. There are criminal penalties for those who hide assets or do not report all their assets/debts. I know and understand the temptation to do so, but please don't make that mistake. I spent over twenty years as a paralegal for bankruptcy trustees, doing asset recovery and investigation. There's not much they haven't seen, and they have many methods of ferreting out assets. Some may slip under the radar, but would you want to take the risk? There are criminal penalties for bankruptcy fraud and you could go to prison. If you want to begin a new life debt-free, it's prudent to do so legally, without hiding assets. A good bankruptcy lawyer will advise you on how to protect yourself, and hopefully he or she will be competent enough in the area to keep you out of trouble. Bankruptcy falls under federal statutes - so it's federal jurisdiction, and bankruptcy judges have more power than most realize.

I also offer some advice to any consumer considering credit cards. Please read their terms and conditions. I know most people surrender to the temptation of their advertising without reading what the terms are and then they end up regretting it later. Most credit cards operate like a pyramid scheme. Their interest rates are very high, and most have a condition saying that if you are late with one credit card payment, all your other credit card companies on cards you hold can raise their interest rates because of it, even if you are current in the other card payments. Credit card companies make their money by luring you in, charging you astronomical fees and interest, and then when you cannot pay (eventually), they write off the bad debt and business loss (and Uncle Sam eats their loss) - they don't lose money. If you want to become debt free, avoid credit cards if you can. Most of us live from paycheck to paycheck, with no wiggle room for high interest credit cards. Also, the most recent policy of credit cards is: when they write off your bad debt, they send out a W2 reflecting it as your "windfall" income so you will have to pay income taxes on the amount they write off.


Au fait profile image

Au fait 3 years ago from North Texas

Bankruptcy unfortunately still has a stigma attached to it, but since finances are for the most part private business one doesn't have to provide that information to the general public. Going to share this again with my followers. I definitely recommend it as good cogitating material. Also pinned to my "Financial Issues" board on Pinterest.

Hope you're well Bobby and kickin' up your heels. :) xx


diogenes 3 years ago

Have just added some air-soles to a new pair of trainers to do just that, my dear...look out for me on my ascent to the moon...

Bob xoxo

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