# Making a Joke of Bankruptcy



## Kerrigan (29 Sep 2012)

http://www.independent.ie/national-...n-back-living-in-his-former-home-3243821.html


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## Brendan Burgess (29 Sep 2012)

Hi Kerrigan

We are putting changes to the bankruptcy acts through the Dáil at the moment.

The general view is that people who are bankrupt should get a fresh start. 
That applies to  small business people, it applies to unemployed people who can no longer afford their mortgages and  it aplies to big property developers as well.
It will apply to people we like and it will apply to people we might not like.

Going bankrupt is not and should not be a life sentence. 

If I choose to buy Sean Fitzpatrick's former home  and rent it back to him, that is my affair. I can rent it to him free of charge if I wish. 

If a relative of mine went bankrupt, I would certainly do what I could to help out.

Brendan


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## mark12 (29 Sep 2012)

Why would anyone bother paying a mountain of debt, when its so easy to get away?


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## Brendan Burgess (30 Sep 2012)

Most people do pay their debts if they can. 

If they are bankrupt, they can't.  It happens.

If they can pay their debts, the courts will not allow them go bankrupt.

Brendan


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## oldnick (30 Sep 2012)

Brendan -you claim that most people pay their debts if they can.

I think the point that Kerrigan and Mark12 are making is that far less people will pay their debts if they can pop over to the UK leaving a mountain of debt in Ireland - and then pop back without having to pay a penny to honest creditors.
Basically it's  far too easy to get away with debts by using this  UK route.

Furthermore  ,and I am not referring to any particular case, when one sees developers and others lving the high life whilst their creditors have suffered financial loss it leaves a nasty taste.

The taste gets worse when one sees that one's wife or others who made their money whilst working for the so-called bankrupt have "helped" him...
(oh, it's not my mansion that I'm living in -it's my wife's ,my daughter's, my mum's - they made a lot of money and could afford to buy it. I'm poor now and starting again.)

you state "_If they can pay their debts the court will not allow them to go bankrupt"_

But how  do the UK courts have any idea of what the person really has ?
Do UK bankruptcy courts investigate  how much the person paid family members or close friends prior to ceasing trading?  Suddenly, a wife or brother or son ends up owning the asset previously owned by the bankrupt. And the happy bankrupt is back in his home again !(not "his" of course, but that of a close helpful relative).

To repeat - I am talking generally and not about any specific case.


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## goingforgold (30 Sep 2012)

Brendan Burgess said:


> Most people do pay their debts if they can.
> 
> If they are bankrupt, they can't. It happens.
> 
> ...


 
I think you  have a very idealistic view of the whole process. Unfortunately it is now a fact that a large portion of people can pay their mortgages but won't pay. 

They can "hide" their money by placing it under the mattress, in their parents bank accounts (I know of one person where this is happening), in non Irish bank accounts (know of one couple owho have substantial amount in a US account) etc etc. Although we say these people will be caught the reality is that the vast amount won't. 

Just like all those people who draw the dole and work off the books, this is another worrying trend on the increase I think.


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## mark12 (30 Sep 2012)

Hiding income and assets is human instinct, perfectly normal and expectable in such a crisis, what worries me as a taxpayer who will foot the bill for all this is that the government is creating an incentive for people to go away not to stay. 
I would prefer to see half the debt forgiven for these people, than to have all of it gone in the UK bankruptcy system.

I would prefer to pay half of these peoples debt, rather than all of it, 

That's what the government and all the experts haven't realised yet, even a 5 year old child understands that half is better than nothing.


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## Kerrigan (30 Sep 2012)

oldnick said:


> But how  do the UK courts have any idea of what the person really has ?
> Do UK bankruptcy courts investigate  how much the person paid family members or close friends prior to ceasing trading?  Suddenly, a wife or brother .



No, this is not as extensively looked into as one might think.  Also on a lesser note the trend of DM companies in this country never request payslips, bank statements etc. yet they will fight tooth and nail to get a debtor released from 75% of their debts or get them onto a repayment plan to pay the bare minimum to their debtors in which case the debt will almost never get fully repaid and finally the debt gets written off never to resurface again apart from the tab the TAX paper has to pick up.

Mark, I agree with your post and agree with every other post you have put on here.  It is all very simple arithmetic but the brains that are running this bankrupt state are blind to see where this is all leading.


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## Bronte (1 Oct 2012)

Isn't it great Flemming's son in law had 250K to hand to buy the property.  Maybe he'll sell it back to his father-in-law in a few years.  

I wonder if son in law puts into into his wife's name and then takes his name off it, so no CGT, nor stamp duty I think, then can she gift it to dad.  Cannot remember the rules but how would one ensure the least exposure to tax.


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## emma09 (1 Oct 2012)

mark12 said:


> ...., even a 5 year old child understands that half is better than nothing.



I agree!


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## mark12 (1 Oct 2012)

John Fleming got rid of 1 Billion, dividing that by 1.7 million working people, equals €588 per worker. 
I have already paid my property tax of €100, i still owe John Flemming €488, can i pay the rest in instalments please?


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## emma09 (2 Oct 2012)

Mark12 to pay in instalments you will have to set up a Direct Debit and the Banks WILL CHARGE YOU for EACH  Direct Debit  ;-)  Can you not try to squeeze your Household Budget a bit more to give the remaining 488 to John Flemming and the likes.. in one go!


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## gillarosa (2 Oct 2012)

Fot those that feel that profits are private and losses are social this model will remain and can be availed of by this individual and his ilk, it is a joke but a really bad one.


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## GDUFFY (2 Oct 2012)

People wake up !
Your anger is misplaced , your anger should be directed at the TD'S /parties of the previous government and present government who perpetuate this crime on the Irish people.This bankrupt never borrowed money from the Irish state or Irish people AFAIK. He borrowed from private banks . People who go around giving out about people who have availed of bankruptcy need to ask themselves these questions .
Who put you on the hook for this debt ? Fianna Fail & Greens .
Who is keeping you on the hook ? Fine Gael & Labour.
Who benefits from us (Irish People) converting this private debt to Sovereign debt. Banks and bondholders who financed our banks to loan such amounts.


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## Wishes (2 Oct 2012)

I am not speaking of this particular case but I am aware of the supposed 'suffering' of a speculator who is supposedly in the UK filing for bankruptcy.

They are currently walking around their community still mixing with the great and the good.  This is not local gossip as I have seen this with my own eyes.  Their home still seems to be as is, but their fleet of fancy vehicles are gone.


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## Bronte (2 Oct 2012)

Wishes said:


> I am not speaking of this particular case but I am aware of the supposed 'suffering' of a speculator who is supposedly in the UK filing for bankruptcy.
> 
> .


 
Are you saying there is no pain to a bankruptcy?


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## DB74 (2 Oct 2012)

Bronte said:


> Are you saying there is no pain to a bankruptcy?



There is for creditors anyway


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## Wishes (2 Oct 2012)

Bronte said:


> Are you saying there is no pain to a bankruptcy?



There seems to be more pain for couples with children who have to move to the UK and live in a one bed flat in an undesirable part of London with little to no income.  

These people did not squirrel lumps sums of cash to their family for the purposes of buying their home and then gifting it back to them on completion of bankruptcy.


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## Bronte (2 Oct 2012)

DB74 said:


> There is for creditors anyway


 
You're absolutely right DB74. There is a lot of struggling creditors out there who have many reasons to be angry. Personally I don't have any problem with anyone going bankrupt as if one believes in capitalism one understands that there will be failures. 

What gauls one though is those who can move assets about to suit a bankruptcy, and then comes back in business with low and behold a new company, I'm am not referring in any way to John Flemming, just as usual talking as I do about bankruptcy in general.  It's very important on this thread we do not speak about anyone in particular.


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## Bronte (2 Oct 2012)

Wishes said:


> There seems to be more pain for couples with children who have to move to the UK and live in a one bed flat in an undesirable part of London with little to no income.
> 
> These people did not squirrel lumps sums of cash to their family for the purposes of buying their home and then gifting it back to them on completion of bankruptcy.


 
Absolutely totally in agreement with you wishes.


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## Wishes (2 Oct 2012)

I think what is so frustrating is the lack of extensive forensic accounting into certain individuals to ascertain where monies have gone.  If there are red flags he/she should be prevented from declaring bankruptcy.


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## oldnick (2 Oct 2012)

Wishes..
 -this has always been the case in Ireland. When i was a travel agent  several of my esteemed colleagues went bust .
Or ,to be correct ,they ceased trading -owing creditors -even the Revenue. Staff were owed money and had to apply to SW for their money and redundancy.

I confess that some of these travel agents were friends. As far as I know not one of them was ever investigated and pursued by their creditors. Sure, lots of nasty letters, phone calls etc but eventually these ceased.

I believe that maybe one was chased by Revenue but there were additinal reasons for that.

Coincidentally, many of these guys seemed to have no personal financial problems - and with somewhat large pay increases and bonuses in the period before ceasing trading they all seemed quite comfortable.

Now, they were all trading as ltd companies -but the same lack of control and investigation applied there asd it seems still to apply to the bankrupt businessmen.


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## Jim2007 (2 Oct 2012)

Wishes said:


> I think what is so frustrating is the lack of extensive forensic accounting into certain individuals to ascertain where monies have gone.  If there are red flags he/she should be prevented from declaring bankruptcy.



Do you have any idea of what such an investigation cost?  Speaking as someone who actually worked on a few such investigations in the 1980s, I can tell you that you'd be very hard pushed to find anyone who will do them for less than say 50 to 75 Euros per hour in todays terms...  Legal fees, expert witness fees and so on pile up and before you know it, whatever assets remain have been consumed by the investigation!

And when it comes to the actual investigation, knowing what you believe happened and finding sufficient evidence to prove it before a court are to very different things.  Oh you'll find lots of people willing to whisper in your ear, but ask them to sign an affidavit and they'll head for the exit - . 

And then there is the issue of acting in the best interest of the creditors: are you really acting in their best interests by using up whatever assets remain in an investigation that might or might not yield results as opposed to simply paying out what is available and drawing a line under it?  Most creditors will opt for the pay out.

The best one can do is spend a few hours reviewing bank statements and any other documents that you can find for say the last 18 months and if nothing obvious shows up, move on...


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## Wishes (2 Oct 2012)

True Oldnick.

I have noticed the lack of control and investigation now seeping into cases similar to my own.  I own a lot of money but it is mere buttons compared to the Million and Billion Euro club.

I have rescheduled most of my debts but not one of my creditors have asked for proof of income or bank statements, apart from my mortgage company.  They have all literally took my word.  Of course I have been truthful with them but how many more are lying true their teeth.  

Mortgage debt is being investigated but unsecured is not.


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## Wishes (2 Oct 2012)

Jim2007 said:


> Do you have any idea of what such an investigation cost?  Speaking as someone who actually worked on a few such investigations in the 1980s, I can tell you that you'd be very hard pushed to find anyone who will do them for less than say 50 to 75 Euros per hour in todays terms...  Legal fees, expert witness fees and so on pile up and before you know it, whatever assets remain have been consumed by the investigation!
> 
> And when it comes to the actual investigation, knowing what you believe happened and finding sufficient evidence to prove it before a court are to very different things.  Oh you'll find lots of people willing to whisper in your ear, but ask them to sign an affidavit and they'll head for the exit - .
> 
> ...



Hi Jim,

Maybe I'm being naive but surely 1 to 2m put aside to investigate some very high profile cases would be worth while.  What about a very high profile case were there is believed to be millions of euro worth of assets.  Surely this has to be worth pursuing?


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## Complainer (2 Oct 2012)

I guess what Kerrigan is getting at is that a gift to a bankrupted person seems like a sneaky approach. If the bankrupted person has access to such gifts, shouldn't they used to be able to pay off their debtors. Is it right that Mr Fleming gets to live in his nice house while the people of south Dublin get literally overshadowed by the 14-storey monstrosity of an empty shell building that his company left behind. 

I don't think anyone would have a problem with Mr Fleming living in an ordinary house in an ordinary place, but that's not what is happening here.


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## Bronte (3 Oct 2012)

Complainer said:


> I guess what Kerrigan is getting at is that a gift to a bankrupted person seems like a sneaky approach. If the bankrupted person has access to such gifts, shouldn't they used to be able to pay off their debtors..


 
What gift are you talking about, there has been no gift to anyone. A son in law as is his right purchased a property previouilsy owned by his bankrupt father in law, he didn't purchase it from the father in law, but from the UK receiver (or his agent in Ireland).

You seem to misunderstand bankruptcy, if they subsequently become wealthy, inherit or are gifted or win the lotto whatever, they have no legal or financial obligation to go back and pay creditors. If a person has done their best and goes bankrupt well the best thing for society is that that person goes back to being a productive member of society and starts hiring people again. 

Not referring to the Fleming case, but any developer who comes back to Ireland and seems to start again, having assets, a new company, having transferred assets etc to relations, well that is a fault of regulators and government in allowing it. But it is also entirely possible that though the good years, clever people in business transfer, as is their right, profits/assets to spouses just in case their might be a rainy day.  One is allowed after all make a profit. 

Not in relation to the building you mentioned but to shell buildings in general left after the boom, what are the Corporation doing about those, why isn't a law passed that unkept buildings have to be taken down or sorted out by the owners (ie the banks) and if your point is that these buildings are in general monstrosities, well contact the planning offices and their experts who allowed anything to go up, many very badly built, ugly and downright dangerous (Priory Hall). What is amazing to me is that the same sorry mess could happen again tomorrow because nothing has changed.


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## Wishes (3 Oct 2012)

I remember a friend who was a sub-contractor back in the 80's had to wind down his limited company.  He was told by his accountants "not to surface in business for another three to five years".  What I don't understand is how these people are able to swan back into business and start up new companies while the average Joe Soap is made feel guilty by the new buzz words moral hazard.     

Regarding the derelict or shell buildings around the country, nothing seems to be done to sort this mess out.  

The Corporation seem to be doing very little as far as I can tell.  Only last year I was driving past a derelict apartment block belonging to them, when I noticed a crowd of undesirables trying to gain entry.  After I contacted the Gardai I called the Corpo. and I was asked to give them the address of the building.  I told them I did not know the exact address but I could explain exactly were it was located.  After a tiring five minute explanation I was told they could not pick up on my complaint as I failed to give exact address of apt. block.


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## Complainer (3 Oct 2012)

Bronte said:


> What gift are you talking about, there has been no gift to anyone. A son in law as is his right purchased a property previouilsy owned by his bankrupt father in law, he didn't purchase it from the father in law, but from the UK receiver (or his agent in Ireland).


The 'gift' is the allowing the father to live in the same house again. If the father has access to this gift, it should really be going to the debtors. Why doesn't the father kindly accept the gift, rent out the very fancy house, use the incoming rent to rent a modest 3-bed for himself, and refund the difference to his debtors?




Bronte said:


> You seem to misunderstand bankruptcy, if they subsequently become wealthy, inherit or are gifted or win the lotto whatever, they have no legal or financial obligation to go back and pay creditors. If a person has done their best and goes bankrupt well the best thing for society is that that person goes back to being a productive member of society and starts hiring people again.


I don't misunderstand it at all. I understand well how it works, and I'm pointing out a big problem with how it works. It would indeed be great for society if he goes back to being a productive member of society and starts hiring people again, but does he really need a mansion to do this? Or could he do this from a modest 3-bed?



Bronte said:


> Not in relation to the building you mentioned but to shell buildings in general left after the boom, what are the Corporation doing about those, why isn't a law passed that unkept buildings have to be taken down or sorted out by the owners (ie the banks) and if your point is that these buildings are in general monstrosities, well contact the planning offices and their experts who allowed anything to go up, many very badly built, ugly and downright dangerous (Priory Hall). What is amazing to me is that the same sorry mess could happen again tomorrow because nothing has changed.


You are over-simplifying here. There is indeed a legal process around dealing with derilict buildings, and it is a slow, painful process. The banks are dealing with these shell buildings, and the Flemings monstrosity has been sold to someone who apparently is going to redevelop it. I'll believe it when I see it.




Bronte said:


> What gift are you talking about, there has been no gift to anyone. A son in law as is his right purchased a property previouilsy owned by his bankrupt father in law, he didn't purchase it from the father in law, but from the UK receiver (or his agent in Ireland).
> 
> You seem to misunderstand bankruptcy, if they subsequently become wealthy, inherit or are gifted or win the lotto whatever, they have no legal or financial obligation to go back and pay creditors. If a person has done their best and goes bankrupt well the best thing for society is that that person goes back to being a productive member of society and starts hiring people again.
> 
> ...


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## Bronte (4 Oct 2012)

Complainer said:


> The 'gift' is the allowing the father to live in the same house again. If the father has access to this gift, it should really be going to the debtors. Why doesn't the father kindly accept the gift, rent out the very fancy house, use the incoming rent to rent a modest 3-bed for himself, and refund the difference to his debtors?
> 
> 
> .


 

I don't think allowing someone to live in a house would be classed as a gift by revenue. But let's say it was, then he would have to pay CGT.

How could you rent a very fancy house in somewhere remote and get any kind of decent rent. Dublin or Cork city will get you a decent rent for an expensive house, not a town in Country Cork. But let's say he got rent, now he'd be a landlord and all that entails, he'd be paying tax, prsi and the new social charge off the rent, having to pay household charge and NPPR, which are not tax deductable, and you think after all that a family man would have money left over to pay rent on say a modest 3 bed house and also have money to pay creditors. Nothing against you Complainer but that's a crazy idea. Do you know how hard it is to be a landlord with all the costs that have been heaped on recently.

I'm not sure if I'm getting this wrong, but you really seem to resent the fact he's living in a fancy house, Irish begrudgery perhaps, apologies in advance if I've misunderstood you. A question you don't have to answer, are you living near where the unfinished eyesore he built in Dublin is, and has it devalued property in your area?

Just to clarify I'm in no way defending Fleming, just curious as to your angle. I've plenty to say about developers, most certainly about Fleming, but we cannot talk about it on here for fear of libel.

In relation to bankruptcy I take it you don't believe in bankruptcy and people starting again, I mean bankruptcy where someone loses everything and cannot pay their creditors.  Do you believe that people should have to pay back creditors for the rest of their lives if they go bankrupt?


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## Bronte (4 Oct 2012)

Complainer said:


> You are over-simplifying here. There is indeed a legal process around dealing with derilict buildings, and it is a slow, painful process.


 
And whose fault it is sa slow painful process, who created that and who has not rectified it? 

Also who gains by that process?


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## Bronte (5 Oct 2012)

seedyso said:


> Creditors should always have access to future windfall gains, for ever.
> 
> . Debtors may have to take more care when they take out loans.
> 
> ...


 
If that were the case that one were liable forever no business would ever start. Also people would never take an inheritence, would not start a new life and faced with what you suggest would possible commit suicide. You want a person to be punished forever.  How is that a solution.


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## Complainer (6 Oct 2012)

Bronte said:


> How could you rent a very fancy house in somewhere remote and get any kind of decent rent. Dublin or Cork city will get you a decent rent for an expensive house, not a town in Country Cork. But let's say he got rent, now he'd be a landlord and all that entails, he'd be paying tax, prsi and the new social charge off the rent, having to pay household charge and NPPR, which are not tax deductable, and you think after all that a family man would have money left over to pay rent on say a modest 3 bed house and also have money to pay creditors. Nothing against you Complainer but that's a crazy idea. Do you know how hard it is to be a landlord with all the costs that have been heaped on recently.


It's all relative. Pick the nearest 3-bed rental to the mansion. Look at the price differential. The difference between the rental price for the mansion and the rental for the 3-bed should go to the creditors.

It's a nonsense situation of course. The 'gift' of the rental mansion would suddenly disappear if he wasn't going to be living there.


Bronte said:


> I'm not sure if I'm getting this wrong, but you really seem to resent the fact he's living in a fancy house, Irish begrudgery perhaps, apologies in advance if I've misunderstood you. A question you don't have to answer, are you living near where the unfinished eyesore he built in Dublin is, and has it devalued property in your area?


I don't have a problem with him living in a fancy house. I have a problem with him living in a fancy house while his unpaid creditors are left hanging out there. He can live in the Aras for all I care, once he pays his debts. If he hasn't paid his debts, he should be living in modest circumstances until he does pay them.


Bronte said:


> Just to clarify I'm in no way defending Fleming, just curious as to your angle. I've plenty to say about developers, most certainly about Fleming, but we cannot talk about it on here for fear of libel.
> 
> In relation to bankruptcy I take it you don't believe in bankruptcy and people starting again, I mean bankruptcy where someone loses everything and cannot pay their creditors.  Do you believe that people should have to pay back creditors for the rest of their lives if they go bankrupt?


I believe that if they have the means to live in a large mansion, via whatever source or ingenious device his advisors come up with, those means should go to his creditors first.


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## Bronte (8 Oct 2012)

Complainer said:


> It's all relative. Pick the nearest 3-bed rental to the mansion. Look at the price differential. The difference between the rental price for the mansion and the rental for the 3-bed should go to the creditors.
> 
> .


 
You're completely ignoring the fact that he'll pay tax and costs on the rent.  How much do you think he'd have left over after that?  In any case he doesn't have creditors anymore.  He owes nobody anything.


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## Complainer (8 Oct 2012)

Bronte said:


> You're completely ignoring the fact that he'll pay tax and costs on the rent.


I'm sure it is not beyond the creativity of our entrepreneurial classes to come up with an effective solution to the tax issue, just like they've driven coaches and horses through lots of other tax laws.


Bronte said:


> In any case he doesn't have creditors anymore.  He owes nobody anything.


Technically, you're correct. Morally, you're wrong.


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## Bronte (9 Oct 2012)

Complainer said:


> I'm sure it is not beyond the creativity of our entrepreneurial classes to come up with an effective solution to the tax issue, just like they've driven coaches and horses through lots of other tax laws.


 
This is a money website and you've not explained how there would be much if any money left over despite my asking a few times now.  You cannot just throw out a statement that he can pay rent to his creditors without doing the sums.  Plenty of landlords are struggling.


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## Bronte (9 Oct 2012)

Complainer said:


> Technically, you're correct. Morally, you're wrong.


 
I think you may mean morally he's wrong, not me?  And he doesn't technically have no creditors, he legally has no creditors.  Do you think there ever should be bankruptcy?

(Mind I'm not saying anything about Fleming's morals)


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## Bronte (9 Oct 2012)

seedyso said:


> His creditors have effectively been stolen from, .


 

How so if the man went out of business?  We live in a capitalist society that recognises bankruptcy and allows the creation of companies.


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