Irish bankruptcy in the UK is just ripping the rest of us off

DB74 said:
OK I'm confused here then

Either a bankrupt pays a portion of debt after the court hearing or they don't. Either the creditors receive an extra 11 years payment under the Irish syatem or they don't

Which is it?
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Under the Irish system the creditors get almost nothing. The banks only bankrupt the rich. Remember they the creditor must pay all the expenses of bankruptcy.
The average Joe won't be able to bankrupt himself due to the vast expense involved. It is only a rich man's game in Ireland.
 
seantheman said:
It must be a great source of relief for these people that are suffering and seeking UK bankrupcy that caring guys like you Steve give up your free time and do this pro bono work.
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My understanding is that Steve is in the bankruptcy business so presumable he makes a living from it. And nothing wrong with that.
 
DB74 said:
My main issue is the 12 months as opposed to the actual bankruptcy.

I just feel that 12 months is too short and therefore too much of an easy option for people, in some circumstances.

I would prefer to see a 4-5 year discharge period.
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Where is the evidence of this being an easy option? If you and your wife lost your jobs would you think differently about UK bankruptcy, maybe you'd be very grateful to England for having a more humane way of dealing with people who cannot pay their creditors while our government can overnnight guarantee bankers but cannot in 3 years change the Irish bankruptcy laws.

It is not an easy thing to leave lock stock and barrel and set up a new life in the UK, might be easy for a young single person but I can't imagine it's easy for married people, especially those with kids. I imagine most people for the past couple of years have been living quietly in despair, living with shame and embarrasment, not able to pay their mortgages, getting hounded by credit card companies (and we heard some of those nightmare scenarios on here), sinking into more and more debt as nastier and nastier letters arrive, wives with kids having ex criminals knocking on their doors demanding repayment etc. And no leadership from the governement on changing the laws.

There will also of course be people who have money/assets squirrelled away from their creditors (holiday home in Spain/Bulgaria/Dubai and cash in a credit union not linked to any system etc), and will avail of the UK bankruptcy regime. Not sure what can be done about that.
 
I think the point OP is trying to make is that a lot of us are probably technically bankrupt having lost jobs or had pay reduced and trying to service huge mortgages. We could move to the UK, declare bankruptcy and never repay what we borrowed.

In my case, for example, I am treading water after several years of grossly reduced income and paying interest only and trying to make ends meet. (Not looking for sympathy, there are many worse off than me).

I would meet the bankruptcy criteria in UK if I was to move there but I haven't (yet) because I keep hoping things will pick up. In my case the creditors are getting the interest on the mortgage at present and eventually they will get back all the money they loaned.

If I was to go bankrupt in UK they would get a house worth less than the mortgage and I would be debt-free. In my case the creditors will get more than they would if I were to go bankrupt in UK.

I don't think I am in a particularly unusual financial situation.
 
Sunny said:
You are talking about if you make bankruptcy easier, more people will avail of it like it is a lifestyle choice. It's not. You are either bankrupt or you are not. The question is how long to we punish people for it and how hard do we make it for them to start over again.
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I think is the best argument so far, bankruptcy is not a life stele choice. Either you are or you aren't able to pay your bills. Whether the period is 1 year or 12 years has no baring on that fact.

DB74 said:
The bottom line is that if you make something easier then more people will avail of it. I don't think you can argue with that (or maybe you can!).

If you have 10 people and 1 goes bankrupt then 9 people have to take up that slack. Make the process easier and 3 people avail of the process. Now you have 7 people taking up the slack.
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I think it is completely wrong to say that people simply decide to go bankrupt. Either you can pay your bills or you can't. During bankruptcy it is mainly the creditor that loses out, which is mainly the banks. In Ireland's case it means that the tax payer is liable for quite a bit of written off debt. But it is not the fault of the bankrupt that the government decided to guarantee bank liabilities, they should not be punched additionally for the mistakes of others.
The way the system should work is that if 1 out of 10 people declares bankruptcy then only those of the other 9 that made loans to that person should lose out. It certainly does not mean theta there is suddenly a flood of bankruptcies. But maybe you can back up that claim with data from the UK after they changed their laws.
 
Chris said:
But maybe you can back up that claim with data from the UK after they changed their laws.
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Well in 2001 there were 6,295 Individual Voluntary Redundancies in the UK (as opposed to creditors petitions etc). In 2002 the figure was 6,295. In 2003 the figure was 7,583.

The law then changed in 2004 and the figures since then are

2004 - 10,752
2005 - 20,293
2006 - 44,332
2007 - 42,165
2008 - 39,116
2009 - 47,641
2010 - 50,716
2011 - 36,009 (1st 3 qtrs only but on course for ~ 50,000)

Obviously the worldwide recession will have increased the numbers anyway so it's hard to know what impact the law change would have made in a less trying economy.

However a four-fold increase in the 2 years after the law change (2004-2006) is a startling statistic

[broken link removed]
 
It's not startling at all considering people had probably lived in misery for years before the law change so you were always going to see a jump at the start. What you are not seeing is evidence of people choosing bankruptcy to escape debts after irresponsible living.
 
Sunny said:
It's not startling at all considering people had probably lived in misery for years before the law change so you were always going to see a jump at the start.
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Which is just another way of saying that if the process is made easier, then more people will take that option!
 
Is it true that in the UK bankruptcy process pensions are safe but in Ireland they are not?

If so creditiors would lose out where there was a substantial private pension.
 
Bronte said:
My understanding is that Steve is in the bankruptcy business so presumable he makes a living from it. And nothing wrong with that.
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Jeez,I got the wrong end of the stick here completely,I thought he was a kina English version of New beginnings,a type of a Robin Hood
I was under the impression that there was no advertising allowed on AAM,so when i saw all the threads that Steve had either started or contributed to, I figured he must be offering a free service.Sorry about the misunderstanding
 
Sunny said:
It's not startling at all considering people had probably lived in misery for years before the law change so you were always going to see a jump at the start. What you are not seeing is evidence of people choosing bankruptcy to escape debts after irresponsible living.
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That's interesting, there are a lot of people who were irresponsible during the boom, so naturally some of them/a lot of them are really bankrupt, that is to say cannot afford their debts. The question is what do we do about it.

The only real difference with the UK system is that it is shorter, ordinary people can afford it (only rich Irish people can go bankrupt here) they can get on with their lives more quickly, it stops social problems, depression, suicide, family breakups, unbearable stress and sleepless nights. Certainly I've noticed on AAM that some of the people posting seem to be in desparate circumstances, have others not noticed this?

What I do not know is if a lot of people who lived the high life, hid some cash/assets and go UK bankrupt and get back on their feel, will they have learned anything. And then go mad financially and bankrupt again.

As for the moral agruements on debt, I have always been of the view that one should pay one's debt, but that moral compass has been sorely tested by the actions of the Irish government, the creation of Nama, the treatment of banks and the fact that no one has been charged with any crime while retiring on massive pensions, the fact that the figures on austerity do not add up, the government lies, and the invisible bondhholders and no meaninful reform of anything in the system.
 
ajapale said:
Is it true that in the UK bankruptcy process pensions are safe but in Ireland they are not?

If so creditiors would lose out where there was a substantial private pension.
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But how many people would have a substantial private pension? And how many of those are going down the bankruptcy route?
 
Thanks for digging out those numbers DB74.
Despite the numbers I still fail to see how this is a bad thing, i.e. having more people recover from insolvency in a quicker period of time. If the Irish taxpayer was not on the hook for the debt write offs, but rather the bank's bond holders and other investors, then I don't think there would be much discussion about it. The problem is not the amount of bankruptcies or an increase in them, but rather the fact that successive governments have guaranteed bank debts.
 
Chris said:
Thanks for digging out those numbers DB74.
Despite the numbers I still fail to see how this is a bad thing, i.e. having more people recover from insolvency in a quicker period of time. If the Irish taxpayer was not on the hook for the debt write offs, but rather the bank's bond holders and other investors, then I don't think there would be much discussion about it. The problem is not the amount of bankruptcies or an increase in them, but rather the fact that successive governments have guaranteed bank debts.
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+1

Also the UK is the destination of choice for a lot of Europeans facing bankruptcy ,Germans,French, etc. So those figures include those people too.Not sure if there are stats for nationality of bankrupts ?
 
I think we have no choice but to have the same time period as the UK because otherwise people will continue to go to the UK to be made bankrupt.

I think it will mainly be people that have no hope of recovering that will take the bankruptcy option and they are not currently paying their debts in Ireland anyway so what is the difference whether they are bankrupt or not.

That is unless you just want people to be miserable. If banks wont negotiate on reasonable settlements what choice do these people have? I think if banks were more reasonable and accepted that they are partly to blame (not fully but partly) for people taking out excess credit and writing off some of the debt people may be able to cope but all they are doing is saying "give me the money back" and "I dont care how you get it just get it". There is no acceptance of wrong doing on their part at all. Despite the fact that the money that the country saved ie the pension fund was given to the banks to allow them to write down debt and start lending, they are doing neither.
 
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