People accumulate debt in various ways such as business, gambling, shopping, health problems, job loss, redundancy and relationship breakdowns amongst others. I built up almost £33,000 of debt through loans and credit cards as a student and a whopping £450,000 plus through a business I started not long after university, all coming to an end at the age of 27 when I declared myself bankrupt.

Bankruptcy suddenly became a realisation for me when my business went from good to bad:

After discussing the possibility of starting an insurance brokerage with two colleagues we decided to go for it. At their flat and with no capital behind us we started telemarketing using the BT phone book. From there we grew the business to employ 20 staff and a turnover of about half a million pounds per year. It was great – we were becoming a prominent player in the online market and had several major life insurance companies showing interest.

Then it went downhill very quickly. Unprecedented changes in the industry very quickly impacted a small company such as ours. The debt began to build and every little problem seemed to have financial consequence. The company became insolvent and appointing an insolvency practitioner was the responsible action to take. Unfortunately the other two directors disagreed and were happy to continue trading so I resigned.

Unemployed with £33,000 of personal debt I could barely manage and a potential £450,000 plus of debt that depended on the success of the company called for a careful review of my personal finances. I had little faith in the leadership of the company to direct it out of insolvency, which in essence meant the £450,000 was a harsh reality!

Before making the decision to petition for bankruptcy I knew there were several lifestyle factors to consider first:

  • My personal objectives for the forthcoming years and how bankruptcy would impact. What are the long term effects? What would be the affect on Miss Piggy?
  • My short term financial position as any proposal to creditors to aviod bankruptcy would have to be acceptable. Was a bankruptcy alternative a consideration?
  • Having worked in financial services for the last 4 years threw a spanner in the works as personal bankruptcy would have serious consequences for my career. Would I still be able to work in financial services?
  • What about the stigma of bankruptcy?

Luckily I didn’t have a house or any other valuable assets to complicate the decision further.

Since petitioning for bankruptcy I have come to realise that the hardest part is weighing up the alternatives and Deciding on Bankruptcy.

Posted in Piggy's Journey | 28 Comments

28 Responses to About Piggy Bankrupt

  1. shanmanj says:

    I think the major reason for bankrupt is high-fi life style, spending excessively on wanted things, no foresight about future fiancial consequences,etc

  2. pat says:

    Hi, I think bankruptcy comes about by not being able to do your accounting properly. i.e. paying for an accountant. I would think the major reason for bankruptcy is the VAT, tax, council etc trying to get owings from small self employed people who are just about keeping their heads above water by working and not claiming benefits. Working class people rarely experience the “high-fi life style”.

  3. Anonymous says:

    I do not want to sound critical, but I tend to agree with shanmanj.

    If I ran a business I would be putting enough captial away to at least cover possible personal debt.

    The problem is people generally become greedy and lose sight of the fact that they are responsible for their own circumstances.

    In the end, it is the Bank and its other customers that ultimately lose out.

    Too many people think they can treat their finances like a lottery and then depend upon others’ to assist them when it all goes pear-shaped.

  4. Anonymous says:

    Actually my ‘hi fi lifestyle’ involved 3 loans taken out in my name when I was with my partner and could comfortably afford the repayments. Unfortuntely my partner then left me on my own with my three young children. Now on benefits, there is no way in the forseeable future that I can repay these loans as much as I want to so I have therefore been advised to consider bankruptcy. People go bankrupt for all sorts of reasons, and I find some comments here particularly ignorant.

  5. Anonymous says:

    I have read the same. People do go bankrupt for all sorts of reasons. Some due to job loss, business, divorce, loss income through illness, death of partner etc etc.

    Clearly bankrutpcy is a contoversial subject, however, it is not fair to judge others without knowing their circumstances.

  6. Anonymous says:

    I am fed up with the judgmental attitude expressed by some the comments. God forbid that you hit hard times and have to face the trauma of bankruptcy. I had to declare myself bankrupt after being a victim of blackmail and deception. Life is such that no ones knows what is around the corner. What one need in such situations is compassion not judgment. I have learned alot from this experience and it has made me a more compassion and forgiving person. I am continuing to learn that my dignity is not tied to whether I have a Gold Credit card. It is difficult to keep reminding myself of this when we live in such a materialistic society. If you are facing bankruptcy do not give up hope. True friends do not judge they hug.

  7. steve says:

    Hi all. I have to also agree with the last few posts. I cannot stand these goody goody types who think that all bankrupts are irresponsable morons. I declared myself bankrupt last week as a result of various credit cards and a loan. All these debts were incured when I had no trouble affording them. Then……
    A) My wife of 10 years told me she did not love me any more. (2 children, lovely home in the country etc)
    B) I was made redundant after working my cods off for 3.5 years
    C) I lost my mum aged 59.
    D) I did work for people (im self employed now) on trust and they shafted me.
    The list goes on. I feel so bad that I have had to do this. People just want things. Thats the whole idea of credit.. Some people grow up with nothing and when a bank or credit card company offers you money how many people say “ooh, I wonder if I will be able to afford paying that back if my partner leaves me or I get made redundant”. I sat on the internet one day and filled in an applicattion form for a credit card (you have them for breakfast with bacon) and they gave me a credit limit of £4000!!!!
    Lets not forget that these companies all earn a lot of money from us in interest and charges.
    I for one am feeling a little better about what I have done and wish anyone else out there in the same position good luck in the future.

  8. Anonymous says:

    Hi, It’s great to read the wide ranging commentary on bankruptcy, not so great to be the individual facing it though. I have been a self employed sole trader for seven years, operating an electrical contracting business. Everything started well, I built the business up slowly providing quality labour/services at competitive prices. In less than a year I took the business from a monthly £5k turnover to circa £40k monthly. All it takes in business is one job/project/contract to turn sour, one debtor to go bankrupt in their business to tip the balance and right here is where you find yourself. Three years ago this very situation became my reality, losing circa £60k+ and for the last three years I have battled creditors demands, depression and fear whilst becoming entrenched in the overwhelming desire to rebuild my business through shear determination, long hours, no social life and a large dose of what is affectionately termed as ‘The Ostrich Syndrome’. I have a great sense of personal pride and find it unbearable to believe I must accept the inevitable as my personal mountain was and perhaps still is, too high to conquer.

  9. Anonymous says:

    After reading the various comments, it is clear that we judge others without knowing the background of how they became ‘bankrupt’.

    As said previously, circumstances can change at any time affecting all your good intentions, but because it has not happened to you, does not give ‘you’ the right to judge others. My situation has taught me not to look down on others and judge them, but to empathise and show compassion. I would never have expected this to happen to me, but it did.

    For me bankruptcy was NOT an easy option it was a last resort, my circumstances changed, my income dropped, and I could no longer stick to the arrangements I had made, creditors were unsympathetic, so I joined an IVA, my health was suffering but I was trying, then I was made redundant and eventually had to apply for bankruptcy.

    For all those who believe that all bankrupts have become so because of a high-fi lifestyle, think again, and pray that your circumstances do not change for the worse and affect
    your life in the way it has affected mine and others.

  10. Anonymous says:

    HOW DARE PEOPLE LOOK DOWN AND SAY HIGH FLING LIFESTLE!!!My husband and i worked for five years,giving it our all blood sweat and tears, believing we were securing our pension, forsight for our future along with our sleeping partners.However we got shafted and incurred thousands ,some of which we paid in legal fees,to continue fighting we needed at least£50,000 more.Physically and mentally and all the distress to my young family we couldnt continue and came away with nothing but debt.while the others got it all.Never people to fall down without trying,to clear debt, we took on a new pub,buildingtrade up,giving it our all then councils closing roads, goverment legislations, NO SMOKING BAN,and of course the great british weather.Ask most small publicans about their lifestyle.Needless to say i have nothing but debt,most of which is personel due to keeping the business solvent i owe nothing to my suppliers or staff MY CONCIENCE IS CLEAR.I AM NOT A BAD,GREEDY,CONIVING PERSON ,CICUMSTANCES CHANGE and this has led to bankruptcy and we gave it our all not to!!in our 50’s and have nothing,having to start all again and worked so hard.DO NOT JUDGE PEOPLE!!!! YOU ARE THE LUCKY ONES WHO HAVE NOT BEEN STITCHED UP!WE FEEL BAD ENOUGH AS IT IS.
    We are lucky in some way compared to some others in this situation and when i say we have nothing i mean materially, WE HAVE THE LOVE OF MY FAMILY AND TRUE FRIENDS,who stuck by us.You can only tread water for so long and eventually you only hope now is i still have some time in life to enjoy when this is all over.i should have considered this earlier instead of battling

  11. Anonymous says:

    Agree with some of the other comments made – for me bankruptcy occurred after two years of trying to fight it off.

    I had been a very high earning self employed person but my work meant I had to be all over the country – not at home. When my wife decided to play away, and then go away, I had to stop working, stay home and take care of our two kids. I then discovered she had run up a load of debt without my knowledge too, god knows why.

    The high income dried up overnight and I was unable to pay the taxes that I normally paid out of current income. Yes, black mark against me for not putting it away for a rainy day but I had been in this game for 16 years, and never lacked for high-paid work.

    Stuck at home I tried my hand at commission sales work but couldn’t pay what the tax man was asking (an estimated tax charge, by the way) and couldn’t afford to pay my accountant to work out what I really owed. So the Revenue drove me into bankruptcy, for an amount far higher than I actually owed, but I couldn’t afford to prove otherwise.

    In the end I just thought f**k it and let it happen. It was a weight off my shoulders. I now pay less in rent than I used to pay for a mortgage, and I cant say I’m particularly happy with what occurred, but what doesnt kill me makes me stronger. I am now in a paid job, which is frustrating but better paid than most folks would expect, and since I dont seek credit I dont get refused. I did get a Vantage credit card just to start rebuilding my credit rating but with a rate of about 37% I make sure it’s paid off every month. I’ll never have a card with a limit I cant afford to pay off from one months wages.

    Oh, and I’ve met a couple of nice ladies who’ve made me a whole lot happier than the one who set this ball rolling.

    Bankruptcy aint the end, its a new beginning. And stuff anyone who thinks it’s all my fault.

  12. Anonymous says:

    I am about to go through this after finally plucking up the courage to do so. My debt is overwhelming and I have nowhere and nothing left. I had to sell my business and my beautiful home to pay as much off as I could but I now have to admit defeat and declare bancrupcy. I can’t believe how much they want to charge you though! I’m going bankrupt because I have no money!

  13. Anonymous says:

    It has taken me almost 2 years to finally take the dreaded plunge and file the big “B”…I am a single mother of 2 lovely children whose father lives in the US and does not contribute to their upbringing…I am also on a single figure wage that does not allow me to pay off my debts…I have lost almost 2 stone with the stress and worrying about how I can “rob Peter to pay Paul”….but after many discussions with the Consumer Credit Counselling Service I have finally decided to do what only I can do to better the circumstances for my family…I do not own my home and am glad I dont…but I am now left with the task of trying to find the fee of £495 to file bankruptcy….”Hello….I can hardly afford to pay my bills let alone find the fee….”
    Wish me Luck !!!!!!!

  14. Anonymous says:

    I must just put this as a positive scenario for bankruptcy. Bought a house with my g/f and put far more into the deposit than her, got married. Then it went tits up due to her stabbing me with a kitchen knife in an argument. I told her to go but she changed the locks and sold the car I bought her. Next thing she wants 50% of my business too. Her Dad is a top barrister and at the 1st court hearing is on 1st name terms with the judge! Talk about unfair!
    So I wound uo my business and started a new phoenix one not in my name, went bankrupt and the great thing was – the secured loan for her car. It bit her big time as the receiver insisted on it and my share of the house deposit coming out of the house sale.
    Moral of story – Don’t be a money grabbing bitch, be clever!

  15. Anonymous says:

    Just scanned through the posts on here and it is clear some comments are so extremely ill considered, that the writers flag themselves up as being plain ignorant, stupid or both. As upsetting as their comments are they should be ignored. Unless we know the full details of a case we can only guess what the circumstances relating to a bankruptcy are. Certainly some will have involved excess, high living even. Many though will be heartbreaking stories. Those who judge harshly, should take care, life works in mysterious ways and what go’s around comes around. Apart from that you are highlighting your crass ignorance

  16. Anonymous says:

    I chose the option of bankruptcy in 2005 and it was the best decision I ever made, but also the hardest. I wish I had chosen it sooner. Almost four years on life is sweeter and I now realise there is life without credit. Everything is easy in hindsight but you only have to look at what has happened to the economy to realise that much happens in life that is completely beyond your control. When the proverbial happens and you find yourself in mounting debt no matter what the circumstances what becomes important is your health, your family and to what extent you place your financial success as a measurement of your life’s success.

    It’s always easier for people who haven’t suffered pain to talk about it as if it would never happen to them. I’d have no hesitation to go through the same process again if I had to. I spent so long trying to avoid it that I wasted years of my life fighting the inevitable. You will be judged by others of course you will but so what, let he who has not sinned cast the first stone.

  17. Anonymous says:

    I am not a brankrupt but for the grace of God I have a roof over my head and a healthy bank balance however, I know that all that could fall apart in the blink of an eye. Some ppl are so judgemental. It can come about so easily and not for living the high life. I know some who had a death in the family and had a nervous breakdown, lost their job, home and husband. Come on guys have some compassion!

  18. Anonymous says:

    Myself and my husband have just been discharged, having petitioned for Bankruptcy last year. Our circumstances were that our property, valued at £225k with our lender and various Estate Agents, dropped to under £175k within the space of 4 months on the market. We had a 95% mortgage due to come off a fixed rate, 4 children, and no hope of raising the £50k+ to allow us to sell the property and walk away. We had never missed a Mortgage payment and had a perfect credit history – not one missed payment on any financial product since we were both 18! We were advised to hand the keys back to the lender and file for bankruptcy, as any shortfall in the Mortgage on the sale of the property would be covered by our Petitions. Our property recently sold at auction for £108k! That is £117k less than a Surveyors report I have dated 12 months earlier. Whilst I acknowledge that some bankruptcies are due to negligence and overspending, there are some that are simply unavoidable.

  19. Anonymous says:

    I was stuck in an abusive marriage, had to fight an 18 month divorce then one of my three children became disabled. After two years of operations and wheelchairs I got her back on her feet only to find the stress had affected me so badly I couldn't think straight about anything. A buyer on my house messed me around for six months last year and then pulled out. The equity would have covered my debt. I borrowed the equity to pay debts but ended up using it to live on. Now I have the debts, no equity and my health is bad. I have been looking after myself, hoping to recover enough to work again. In my flawless credit history banks have been so good to me: extending credit. I feel so guilty and have put off going bankrupt. I fear it is the only option. Fear of the unknown is very stressful indeed! I am very frightened.

  20. Anonymous says:

    "if i ran a business" – shanmanj, you clearly don't!

    "not being able to do your accounting properly" – pat, then how did he know he owed more than he was making?

    "if i ran a business i would be putting capital away" – anon, but you clearly don't run a business.

    I *did* run a business. Small onions really. because of other bad payers I had to keep a big overdraft facility. One day I needed it, the next day the bank withdrew it. The day after that I couldn't trade anymore.

    Doesn't quite fit your stereotype greedy, unaccounting director does it.

    This stuff happens every day. Life isn't fair – banks withdraw services, people don't pay their bills and the consequences are businesses go down the tubes, but if you've never taken the risk then you wouldn't know that and you'd come out with ludicrous statements like at the top of my post.

    Some do make it and give people who don't like risks (like the first few posters) nice, safe PAYE jobs – so don't knock people for trying and wtf is a "hi-fi life style"?

  21. Anonymous says:

    I have been bankrupt twice with a business partner and we did not have a 'hi-fi' life, (whatever that is suppost to be!), perhaps you mean 'high flying'?

    Running a small business in this country is not as simple as it looks, unless you run a bank!

    Sir Fred almost helped bankrupt our country and we rewarded him with a pension pot worth tens of millions and £700,000 a year.

    Ask yourself who had the Hi-Fi life and who worked their butt off only to be ruined by the banks!?

    It is ne rule for the rich and another for the rest. If you bankrupt or liquidate a Ltd company or Plc you walk away scott free in the majority of cases. Take Andy Pandy fron HBOS, he's now got a top job with Boots Plc and is better off than ever. His policy's helped ruin many small businesses in this country ass did Sir Fred's, where's the justice in that?

  22. Anonymous says:

    I do believe that there is a dept culture that has developed over the last 10 years or so in which peoples perception of dept has changed to being totally exceptable. What is so hard in being patient and saving up for what you want rather than running the obvious risk of borrowing? I appreciate that some dept is unavoidable i.e mortgage, business, marital breakdown etc. and bankruptcy may be unavoidable also. But a seemingly growing minority of people do see it as an escape route to cover there irresponsible behaviour at the expense of the banks & business's which impacts on us all in one way or another.

  23. Anonymous says:

    Bankruptcy must surely be the most traumatic of events followed preceded by great stress and anxiety. I certainly do not believe that it is mainly caused by excessive living, life is far too complex for such a sweeping generalisation.
    Some of the comments are obviously posted by those who have never had a business and have no concept of how business finance works. I speak from experience as i have had a number of successful businesses and never been bankrupt myself, but i have watched with great sadness many good friends lose everything they had invested in and worked for, and have investigated this site to help one such friend at present.
    So who do we blame greedy bankers, ignorance, the culture of me me me, live now pay later? I do not have the answer but i do believe that a little fellow feeling and a little less judgement would go a long way on these pages especially.

  24. Anonymous says:

    My husband and I choose to file for bankrupcy, we went through with it on Wednesday. My husband was earning a good income until it changed in Feb of this year, not enough money coming in – too much coming out. As so many people have said circumstances do change, we tried our hardest to set up payment agreements, tried to go through an IVA etc, but in the end bankrupcy has been our only option. I am relieved now as we know where we stand. We have enough money to eat, pay our bills and have a roof over our heads. We have air in our lungs and each other. If anything some things are far more important in life. My advice to anyone going through the stress is.. nothing lasts forever try and be thankful for what you have got not what you haven't.

  25. Mary C says:

    I really feel for the lady who is so scared . I have been scared for years . Constantly expecting a knock at the door .I had nightmares about baliffs taking the childrens toys at christmas.
    Yesterday everything stopped we finally gave in and went to court and became bankrupt ! My husband has great faith in people meaning what they say so for years he has believed people when they said they would pay and then disappearing off the face of the earth . We would re mortgage again and again .
    He would pay his staff before us . I
    clothe myself from charity shops we eat food at its sell by date – real high living ! I am almost grateful for the
    credit crunch because at last so many of his clients went down he was forced to liquidate . We filled in the forms from the internet. We went to the court sat in a room with a very nice chap who corrected them .We swore an oath on the bible. We went upstairs to the judge
    who put the time and date on the papers and that was it !! We need to see the
    Official Receiver but I understand there is nothing to be feared .
    Although well meaning people had told us
    that our belongings would be taken to pay our debts it turns out we have nothing of value.No antiques .No expensive furniture jewlery,and electrical goods loose their value very quickly .I cannot put into words the relief we feel .Thank you to those of you whose experiences I found helpful.

  26. Anonymous says:

    After reading the first two or three comments on here I almost clicked off the page, but thankfully I chose to carry on reading and found support in the fact that many of the stories have happier endings.

    Like most people writing here I have found this to be the most difficult decision I have ever taken – had I been living a champagne lifestyle of credit it might have been much easier, because I would have nobody to blame but myself and I would probably have a bunch of memories of great holidays and whatever else you do in that situation.

    I'm 32 and i've never been out of work for about 14 years.

    I started a business with a trusted friend of 10 years who turned out to have been a deceptive little shit playing a very long game, and he has tried to ruin my life – for what reason? Because HE wanted a champagne lifestyle without all the work.

    It didn't matter whether his targets were big businesses, small firms, or individuals like myself. If they had any money or credit facilities they were fair game to be deceived out of anything they had. Yes, I feel stupid. No, I wasn't the only one.

    I have a modest house, I used to drive a reasonable new car, everything was paid for with years spent developing a career and working long hours and making sacrifices to get the best jobs and quickest promotions. Sure, I borrowed money for things but never more than I could afford and I never missed a payment. Nothing that most other people in the same situation don't do.

    I worked for the business I started – the one I left a good job to become involved with, and I did so mostly without pay and surviving on my life savings. I worked harder for the business than I have ever worked. I even had my family invest their savings because we thought we were onto something – and they were happy to because they looked over the material i'd helped my business partner provide based on information he'd given me and it looked great.

    But as it turned out, everything he provided was completely and utterly made up.

    Later, we find out that this guy has ordered company cars, spent more time abroad than he did at home (and not in budget accommodation either), he even did his weekly shop on the business account! But with all the meetings and promises never produced a penny of profit. Oh the meetings took place, just what we were told the outcome of each was, was evidently not what actually took place.

    Because of this creature I am now writing this comment 12 hours before I go to the court to file my petition for a bankruptcy which isn't my fault – I should have done it 2 years ago but I thought I might be able to sort the mess out, i've stressed, lost sleep, fought battles and tried to go to work looking like I was in control of everything and keep up good humour. I could take some responsibility for being a trusting fool but I know that I am not the only one that was taken in – he even got money from a big bank!

    Leading up to this, the first thing that has to go is your car if its worth anything, and they never sell for anything like you bought them for.

    Then you have to consider the fact that you could lose your home, though hopefully not because for once in your life, you count yourself lucky that its worth less than you paid for it.

    I'm single, so thankfully I have no kids or partner to have to explain this to – but at a point in your life when you think you might want to go out and see who you can meet, your confidence is nowhere near what it used to be.

    And I feel bad, because I feel guilty – *I* feel guilty – for going bankrupt because I can't pay debts for money that was stolen for me.

    Whats happened to the other guy? He's under investigation for sure, he's acted criminally for sure – but will anything come of it? Fingers crossed – but I just don't know.

    So before you judge, consider yourself lucky that its us doing this, not you. And watch your back, because you don't have to be irresponsible to end up in this position – just unlucky.

  27. Anonymous says:

    To all those judgementals. In my experience those who have never made a mistake are those who have never tried.

  28. Somebody Else says:

    This is probably one of the best websites I have found regarding bankruptcy in the UK. I like the fact that the info is from a real personalised experience that people can relate to rather than just the facts from a ‘professional’ site.

    However I feel that I am missing something. Lots of people talk about the stress and being scared. Am I supposed to feel this way too? Just not sure why I’m not seeing a light at the end of a tunnel. I can’t even find the tunnel.

    I know what will happen, it’s just a process? Maybe I am lucky in that I have very little else to lose. I have an old ‘P’ reg car and live in a furnished 9 x 7 room. I sleep and go to work. I bring in less than £1k per month. So with absolutely no chance of paying my debts I guess bankruptcy is the right way to go. It’s just a process of tying up the lose ends rather than leaving a mess for somebody else to sort out.

    The decision is made and just saving for the fee and timing it to end just before I my 50th. At least at the end I’ll be debt free.

    Thanks again for a refreshingly informative bankruptcy site.

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