To those that live in the UK…just a couple of questions…
A friend of mine wants to avoid paying off his student loan and hes checking out whether its a good idea to declare onself bankrupt…cant say that when he mentioned it i wasnt intrigued…his understanding is that all his overdrafts, credit cards and his loan would be void…he just just has three or so years wihich are a bit hellish…he like me wants to travel so said he can just go abroad for 3 years and then he can come back debt free…the disadvnatages iv heard are that they can repossess your home but he lives in halls and his parents have moved house lately so it is as foolproof as it sounds…seems a little to easy to save 30 grand if thats true?..
Re: Bankruptcy...
Keep in mind that filing for bankruptcy not only affects your past credit, but also your future credit. It is not that easy to do either because atleast in the US, they are aware of what people try to do to get out of loans, etc.
Re: Bankruptcy...
umm well yh in future wen he wants to buy a house then it will effect him
Re: Bankruptcy…
he can if he can live with a bed credit record for, lets say, SEVEN years. 
Re: Bankruptcy...
There are usually two sides to every story. A bankruptcy filing does have some disadvantages although they may seem minor compared to living with a giant burden of debt.
Therefore before you friend file for bankruptcy , he needs to carefully consider several issues and then determine if bankruptcy is the best alternative for him.
A bankruptcy filing will invariably damage his credit rating. For a period of time after the filing, he will normally be deprived of access to consumer loans and credit cards… Renting a home or obtaining a home loan may be difficult because of his damaged credit. But filing for bankruptcy will not completely ruin his credit. Although it will affect his credit for a while but tens of thousands of individuals have rebuilt their good credit ratings after their bankruptcies.
A bankruptcy filing always has immediate consequences not only to the party filing for bankruptcy, but also on other parties who will be either directly or indirectly affected by the bankruptcy proceeding.. A bankruptcy filing has a ripple effect that spreads far beyond the party filing a bankruptcy petition. Your friend’s spouse and family may all be affected by his bankruptcy filing. .
With few exceptions, in the United States Or Uk a person may not be jailed for failing to pay a debt. The exceptions include failing to pay fines, penalties, or child support. Although failure to pay debts may lead to litigation…
Filing bankruptcy will not cause you to lose your job. Also, it will not cause you to lose your Social Security or other government benefits.
So in this case your mate could stay in United kingdom , no need of going abroad..
Filing for bankruptcy is a matter of public record and names of individuals filing are sometimes published in the newspaper. Your personal financial history will be open to the scrutiny of others including potential employers, landlords and insurance companies.. Utilities cannot deny you service because you've filed bankruptcy in the past; however, they may require a deposit prior to re-establishing service
Although it is illegal for a potential employer to discriminate against individuals who have filed for bankruptcy, but it happens in real world .
So here we are matey bhoy , now the ball is in your friend's court :)
Re: Bankruptcy...
Hi all, Im new to Gs, so salam to all.
I would suggest an IVA, or is that what your friend is doing?
E.
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Thanks for the replies especially Aliyish...
Re: Bankruptcy...
sorry to bring the religious thing into it...but a person cannot be buried until their debt is payed or forgiven. so if anything happens to your friend...anyway!!!!
But in any case im sure it should be his duty to pay his debt back! It will be hard but that will be the right thing to do!
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Stone cold , lalay I presume that you are fully aware of all Ifs and thens related to your Fatwa….
So lets say if I have some debt on me shoulder and I die next die … I have no family members or friends or if I have they aint in position to clear my debt ….
Or lets say I have taken a loan from some financial institution and even if they gona clear it under bed debt because of my untimely death , it may takes couple of days .. There normally have insurance companies to cover this bit but hey normally they aint covered by Islamic insurance ‘ TAKAFUL’ .. And the normal insurance is not compatible with Sharia , right ?
So according to your theory , we cant bury a person unless all of his debts are cleared or agreed by some one else to clear …. Is not veridical
It is may be not preferable but Islam has given us relaxation in such matters … You could bury that person and ask Allah to forgive his/her sins…..
Re: Bankruptcy...
i'd advise him to pay it back
immorality has its price
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i am not passing no fatwa!
We are not talking bout islamic companies or any other companies...and im sure interest will be mentioned sooner or later too!
All im saying is if youve taken a debt out then you should repay it. Why be dishonest?
And as far as the burying goes people are asked if the dead person owes them anything..upon which its up to them to either forgive the debt or still want repayment...upon which it is the deceased's next of kin's responsibilty to repay!!!
Re: Bankruptcy...
Something important for your friend to consider is what will happen to his guarantor. Student loans (in the US anyway) are only given when there is a guarantor - like a co-signer. If the borrower fails to pay what they borrowed, it becomes the responsibility of the guarantor to pay it back.
Does your friend have a job? If he does, during the bankruptcy proceedings, the judge will go over his income and expenses and the judge makes the decision as to whether it should be granted and whether part of the guys income should be garnished (taken out of his paycheck).
He can cause more trouble for himself than its worth by trying to wiggle out of his financial obligation.
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anyway its a student loan...so the only time he will start paying it back is when his salary exceeds 15k. and even then they only take a couple of quid off from your montly pay. Plus if i remember correctly there is no interest...he is only paying off what he borrowed!