Winseer:
Truckyboy/djw - a few thoughts on law interpretation:I always thought that if you pay a court for a winding-up petition, then you get one! Bailiffs are appointed by the court, and anyone else claiming to be a bailiff NOT appointed by a court is bogus. The trigger is “non-payment of a debt”.
There are different types of bailiffs. For enforcement of a County Court judgment, you would be using a County Court bailiff, who is an employee of Her Majesty’s Court Service. These are not the certificated bailiffs (the likes of Constant and Co) that you hear of in contexts such as Council Tax debts. There are also several other types of bailiffs.
A winding-up petition is something of a nuclear option - very much the last step when attempting to enforce a civil debt against a corporate body.
A winding-up petition is asking for an equitable remedy - you have to show that winding-up is fair, just and reasonable in all the circumstances. Usually, the grounds for a winding-up petition is that a company cannot pay its debts - a very different thing to a dispute over whether there is a debt. Unless you have first obtained a County Court judgment (or order from the Employment Tribunal) that the deductions from wages are owed back to you and have attempted to enforce that judgment, the company will merely claim that there is no proof a debt exists.
Winding-up petitions are, in essence, to do with insolvency, not a mechanism to resolve a contractual dispute.
Winseer:
If you are correct about a court not having to “grant” a winding-up petition paid for in full up-front by the plaintiff, then everyone in the country with credit card debts could welch them overnight, and never have to worry about being made bankrupt - because the court won’t ‘just grant it’ (if your interpretation is right, and mine is wrong) unless the card company can prove the debtor owes the money - very hard to do without original signed paperwork nowdays… I can see where you’re coming from, but how come there isn’t a deluge of plebs all pushing for a “debt walkaway” in these hard times?
You are conflating personal bankruptcy and forced liquidation (i.e. winding-up) of a corporate body.
Credit companies do have to prove their debts to apply for a bankruptcy order against a debtor, just as a driver claiming breach of contract (such as uncontractual deductions from wages) by an insolvent employer would have to prove there was a debt owed, typically via a County Court judgment, to get a winding-up order.
The various companies that claimed they could get your credit card debts wiped out used various loopholes (now closed by the courts) to do with the non-availability of paperwork. If the loophole succeeded, it was often a pyrrhic victory - the court would not wipe out the liability for the debt, but would merely make an order that the debt was unenforceable. This meant the lender couldn’t take any steps to get their money off you, but the debt remained on your credit reference file meaning that you had zero creditworthiness. The claims management companies’ claims that they could “wipe out your debts” were simply not true - they cared merely about obtaining large fees, not about the mess they left behind even if they succeeded.
If an individual debtor can persuade their creditors to accept an IVA, that prevents the debtor from going bankrupt. Usually, if an IVA is possible, it is the better option. However, like bankruptcy (and its cousin for those of very limited means, the Debt Relief Order), an IVA is not free of consequences.
Winseer:
Are debtors - be they firms or individuals really beyond the reach of bankruptcy courts nowdays?I obviously stand to be corrected here, as I’ve never bankrupted anyone myself, nor been bankrupted by anyone including myself (Perhaps bankrupting oneself is the only way to BE made bankrupt today?)
Most people pay debts they can’t afford because they’re afraid of court orders, bailiffs, being made bankrupt, and all the asset-stripping costs that go with it.
Remember - disputing there is a debt is a different thing from refusing to pay a debt owed.
Creditworthiness is a huge lever to pay your debts. Many things are difficult if you are not creditworthy - you can’t get utility services without prepayment (which often forces you onto poor value deals), you certainly won’t be able to rent property from private landlords and you can’t spread costs like car insurance payments because that would involve credit. Even 0% finance deals are inaccessible to those who aren’t creditworthy, because they are still credit agreements.
Even a single CCJ can have a devastating effect on your creditworthiness.
The consequences of bankruptcy are such that people will do what they can to avoid it. I know someone who had no chance of repaying debts that were not her fault. When you allow for all the penalty charges she had paid over several years of ‘trying to do the right thing’ and pay the bank back, she had repaid all the capital she had borrowed in full. Most of the remaining debt was due to charges that were added every time she was a little late with a payment she couldn’t afford.
During this period, she had lived below the poverty line, just about managing to eat and pay her utility bills. Eventually, I told her that she should apply for a Debt Relief Order to get herself free of this impossible debt, which she did. Even this simplified procedure for those with limited income and essentially no assets was not easy - she had to provide extensive details of her living costs and demonstrate she had no appreciable assets.
Neither she nor I believe that people should be able to incur debt that they then escape easily. She lived in poverty for years trying to pay back an ever-increasing bill where often the late payment charges exceeded the amount she could repay in a month. Hers was exactly the sort of case the lender revelled in - they had her trapped with a debt that she could not reduce. Her financial circumstances were getting increasingly desperate and I had to join together with her other friends to cover some unexpected bills. However, there was nothing we could do to help her otherwise, as any financial support we provided would have gone straight to her creditor.
When she approached the creditor about the situation, they did everything they could to persuade her to take on an even bigger and less affordable loan to pay off the original one, so that the branch staff would earn commission on the new loan. She would have instantly defaulted on the new loan, but they didn’t care!
My friend asked the lender to write off the debt and was prepared to provide evidence that she did not have the means to make further repayments. By forcing her to get a Debt Relief Order, ultimately her creditor cost themselves a load more money pursuing her whilst the application process was ongoing, whilst her record was wiped clean (though she is subject to the same conditions as a discharged bankrupt for six years).
Winseer:
With Atheism being more and more popular in this day and age, the moral imperative to repay debts no longer applies. I would argue that this latter point is what motivates many firms to act in a dishonest manner both towards staff and the law. Fear of being caught doesn’t cut it. Moral imperative doesn’t cut it. Personal conscience MIGHT cut it.- I’m sure there are some steadfast honest people out there in positions of power - somewhere…
As I recall saying elsewhere on Trucknet, the model of business that features in my legal training is that businesses generally do what is cheapest, not what is right. Unlike individuals, businesses are regarded as making decisions often on purely financial grounds, ignoring the moral considerations.
I wish companies and individuals would do the right thing, but too often they gamble that the chances of being caught out are low and take a chance.
