Students declaring Bankruptcy ?

Same as anyone else's bankrupcy - you declare bankrupcy (or someone makes you bankrupt). You hand over any assets you have (houses, expensive cars - not personal and household items). Your debts are written off completely after 3 years. (if during those 3 years you earn more than around £25k they can take the excess towards your debts).

After 3 years you are clear of debt but expect great difficulty in getting credit/mortgage etc.

Notes Rules are changing from April 2005 to give shorter bankrupcy period They were talking about excluding student loans from bankrupcy but don't know if they have done anything about it yet.

What's the point? What would you gain? You are only bankrupt if you can't pay your debts. Any assets you had because of the loan plus any others assets would be used to pay back the loan. If there's any assets left you retain them if not you would be declared bankrupt.

I get the feeling that you think being bankrupt means you don't have to pay debts but you keep your assets.

Quite simple to answer that one isn't it. Are you a thief or an honest person? smicker

Surely there are very few 21 year old graduates who have real assets like a house or a good car. On the other hand, they may well owe the Student Loan Company and the banks large debts which they cannot possibly afford to pay off in any realistic time frame.

Were I in that position (I was a student in the good old days of the grants), I should merely write to the banks and other creditors and invite them to do their worst. I would even send them a tape of Scottish dance music and invite them to dance for their money. They couldn't put me in prison; what is the worst they could do?

Few creditors these days bother to sue. They take a realistic view that they cannot get blood from a stone and write off the debt after several threatening letters. Sueing costs a lot of money and the student merely turns up at court and says he is only earning £200 at McDonalds and offers to pay the £12,000 debt off at £5 per month. The bank has little alternative but to accept.

The OP asked:

"Whats to stop anybody (ok - me) taking out some big business loans then declaring bankruptcy and getting away with it ?"

If he took out a business loan he would have assets so there is no point.

Student loans are not written off by bankruptcy.

Yes they are at the moment, see the other link in this thread.

Actually he's a troll. Check out some of his previous postings on this group.

James

That is April 2004, to provide shorter bankruptcy. Student loans from the Student loan company have always been excluded bar from a period after labour got in and left a loop hole which I think they have now closed.

As for the going bankrupt, it is only a good idea if really necessary as if you do it a second time in 15 years the rules are allot harder. So the rule is don't unless you have to.

But then I am not a lawyer.

Kind regards

actually , i'm not - uour not sad checking user names r u ?

people r allowed to ask questions , that is , unless u own all of usenet ?

i know there must be a bit to declaring bankruptcy - the question was phrased that way to get an explanation which it has done

sorry and all that , i dont know everything unlike your good self

Sorry I fell for that alright. smicker

Yes but it can't be proven.

Damn, you got my hopes up for a second there, but the law comes in April

- so just over a year instead of the three. Bloody typical that i miss out!

As for the going bankrupt, it is only a good idea if really necessary as if

The insolvency site refers to 15 year bankrupts being all discharged after 5 years, with the first in 2009 implying a 5 year term for second bankrupts in future.

Yes it is typical. If you were to go bankrupt between now and April the 1st 2004 you would remain so until April 1st 2005, on the other hand if you went bankrupt on the 2nd of April 2004 you could be discharged in theory as little as two months later, that is once the Official Receiver etc. are satisfied that they have investigated your situation and have decided that there is no point in keeping you bankrupt. That said in practice this will probably take longer.

Also note that the restrictions on being a director etc. can be lifted if the court is satisfied that it will not affect the public.

Yes, I think that is right. If within 15 years you do it again then the term is

But then I am not a lawyer.

Kind regards

In message , Alasdair Baxter writes

An ""EXTREMELY" GOOD INPUT" for a change. ONE OF YOUR BETTER DAYS OLD MAN?

Roger

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snipped-for-privacy@uk2.net wrote

Are student loans ever secured against anything (other than the implicit "security" of the borrower's own assets, if any)?

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Even if any type of loan ceases to be written off by bankruptcy, there is nothing to stop someone taking other loans that will be so written off, using the money to pay off the loans what won't get written off and going bankrupt. There is also nothing, in practice, to prevent someone taking out unsecured loans and spending the money on untraceable portable assets like some form of collectable, which they can gradually sell once discharged from bankruptcy.

Either way they may be able to have themselves declared bankrupt, and in a few years be far better off than they would have been if they had been honest and worked to save the money. (Yes, there is a down-side to being a discharged-bankrupt, but is it worth (say) £20,000 to avoid?)

I think the combination of saddling a significant portion of young people with very substantial debts, and making life easier for bankrupts, is a recipe for a vast increase in fraudulent bankruptcy. It is just making it too attractive. No doubt the government will have a panic about it in about five to ten years, when they are suddenly surprised by the problem.

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They will be taken and sold by the receiver, the money going into the pot with the rest of the bankrupts assets.