Insolvency

#1
Hi folks, first post from me.

I've been retired a year or two now, and was last at RD about 10 years ago. I do a turn for SSAFA a couple of times a week, and debt issues are becoming something that we are asked to advise on more and more frequently. Although I have managed to get hold of the Army guidance on dealing with debt, and it does mention insolvency, some of the folk I deal with are concerned that it will blight their career forever if they go down that route - which is why they come to us rather than to the unit.

I appreciate the potential impact of debt on things like vetting and suitability for promotion, as these were issues I came across from time to time while serving, but I don't think I ever met anyone who actually went bankrupt.

Can anyone advise on what the 'official' line on insolvency is please? And does anyone know of anyone who has become bankrupt and gone on to salvage their career?

thanks, in anticipation.

CN :)
 
#2
CornishNasty said:
Hi folks, first post from me.

I've been retired a year or two now, and was last at RD about 10 years ago. I do a turn for SSAFA a couple of times a week, and debt issues are becoming something that we are asked to advise on more and more frequently. Although I have managed to get hold of the Army guidance on dealing with debt, and it does mention insolvency, some of the folk I deal with are concerned that it will blight their career forever if they go down that route - which is why they come to us rather than to the unit.

I appreciate the potential impact of debt on things like vetting and suitability for promotion, as these were issues I came across from time to time while serving, but I don't think I ever met anyone who actually went bankrupt.

Can anyone advise on what the 'official' line on insolvency is please? And does anyone know of anyone who has become bankrupt and gone on to salvage their career?

thanks, in anticipation.

CN :)
Welcome to the site, CN.

I am at home, and cannot quote chapter and verse, but the rules appear to have eased. Two years ago, a soldier working for me was bankrupt. He had been bust from LCpl as a result (too complicated to go into here) but had been allowed to soldier on. In my opinion, that was a fate worse than death because he couldn't afford to join in with anything that the rest of his Troop was doing. He was a non-stop welfare case, and never deployed because he would have been back within the month!

There was another case many moons ago (many more than I wish to acknowledge here...), where I took over the affairs of a Cpl and intercepted all his mail. I stopped counting when we hit £25k (interest rates were 9.5% and rising IIRC) and I applied for an administrative discharge, which was granted just before he was jailed by a civilian court for other, cough, matters.

I suggest that it is probably down to the CO; if the CO thinks the soldier is a good 'un and can recover, then it will be OK. However, in both cases in my experience, the soldiers should not have been allowed to soldier on. The operational tempo of today is such that any soldier with financial difficulties is a major liability.

Having previously discussed this with my colleagues, I am aware of the counter argument that such soldiers are usually the ones who are quite content to be deployed for 90% of their time; but if their family is sitting in the patch...., disaster is only a telephone call away!

Litotes
 
#3
Litotes said:
CornishNasty said:
Hi folks, first post from me.

I've been retired a year or two now, and was last at RD about 10 years ago. I do a turn for SSAFA a couple of times a week, and debt issues are becoming something that we are asked to advise on more and more frequently. Although I have managed to get hold of the Army guidance on dealing with debt, and it does mention insolvency, some of the folk I deal with are concerned that it will blight their career forever if they go down that route - which is why they come to us rather than to the unit.

I appreciate the potential impact of debt on things like vetting and suitability for promotion, as these were issues I came across from time to time while serving, but I don't think I ever met anyone who actually went bankrupt.

Can anyone advise on what the 'official' line on insolvency is please? And does anyone know of anyone who has become bankrupt and gone on to salvage their career?

thanks, in anticipation.

CN :)
Welcome to the site, CN.

I am at home, and cannot quote chapter and verse, but the rules appear to have eased. Two years ago, a soldier working for me was bankrupt. He had been bust from LCpl as a result (too complicated to go into here) but had been allowed to soldier on. In my opinion, that was a fate worse than death because he couldn't afford to join in with anything that the rest of his Troop was doing. He was a non-stop welfare case, and never deployed because he would have been back within the month!

There was another case many moons ago (many more than I wish to acknowledge here...), where I took over the affairs of a Cpl and intercepted all his mail.
I stopped counting when we hit £25k (interest rates were 9.5% and rising IIRC) and I applied for an administrative discharge, which was granted just before he was jailed by a civilian court for other, cough, matters.

I suggest that it is probably down to the CO; if the CO thinks the soldier is a good 'un and can recover, then it will be OK. However, in both cases in my experience, the soldiers should not have been allowed to soldier on. The operational tempo of today is such that any soldier with financial difficulties is a major liability.

Having previously discussed this with my colleagues, I am aware of the counter argument that such soldiers are usually the ones who are quite content to be deployed for 90% of their time; but if their family is sitting in the patch...., disaster is only a telephone call away!

Litotes
Lilotes tread carefully my friend you are breaking the law, also soldiers who are in debt we also have a certain duty of care, but agreed if he is his own worst enemy should initially be help and then fooked off at the high port!!!
 
#5
Thanks Litotes, that's helpful. I guess, as ever, the message is to take control early, open the mail, and don't assume it will go away on its own.

CN

PS - nice Owl! Good in Pie? :)
 
#6
CornishNasty said:
Thanks Litotes, that's helpful. I guess, as ever, the message is to take control early, open the mail, and don't assume it will go away on its own.

CN

PS - nice Owl! Good in Pie? :)
No, Strix is a killer wol, who is about to go on his Commando wol course as recommended by Chumpycheeks some weeks ago.

Lits...LOL!
 

oldbaldy

LE
Moderator
#7
From the Army Website:
All Service personnel are expected to manage their own financial affairs responsibly. Such matters are usually regarded as private and personal, but in exceptional circumstances, where the level of debt has become so unmanageable that an individual might become a security risk, administrative of disciplinary action may be taken. Formal Service action would only be taken in cases of persistent and irresponsible indebtedness, as this displays lack of judgement and self-discipline.

http://www.army.mod.uk/soldierwelfare/soldiersupport/moneymatters/personaldebt/sw_fs_mm_pd_w.html
I suppose it will all depend on the both the soldier & the CO's view of him/her.

I do note that one of the phone numbers they advise soldiers to ring is SSAFA Central Office!
 
#8
oldbaldy said:
From the Army Website:
All Service personnel are expected to manage their own financial affairs responsibly. Such matters are usually regarded as private and personal, but in exceptional circumstances, where the level of debt has become so unmanageable that an individual might become a security risk, administrative of disciplinary action may be taken. Formal Service action would only be taken in cases of persistent and irresponsible indebtedness, as this displays lack of judgement and self-discipline.

http://www.army.mod.uk/soldierwelfare/soldiersupport/moneymatters/personaldebt/sw_fs_mm_pd_w.html
I suppose it will all depend on the both the soldier & the CO's view of him/her.

I do note that one of the phone numbers they advise soldiers to ring is SSAFA Central Office!
Yes, I'd noticed that! I am on the end of one of the 'local contact numbers' that they provide. Indeed I rang them myself a few weeks ago, and they posed the question to D Pers, or whatever the purple organisation is called that deals with such issues now, and I got a paraphrase of the guidance you have quoted, together with the information that it is a reportable occurrence.


While not condoning it, voluntary insolvency could be viewed as a way of dealing with unmanageable debt, thus resolving the issue of potential security risks, and removing the stress from the individual concerned, thereby returning him/her to full capability sooner than if they had to struggle on. The related issues of suitability for further responsibility, and a consideration of whether insolvency would constitute 'bringing the Army into disrepute' (or whatever the modern day QR equivalent is) would still remain, of course.


It has become something of a circular question, really. If someone comes to us (SSAFA), one of the first questions they ask is 'Will I be discharged if I go bankrupt'. All we can say, really, is 'it depends' - which doesn't move the situation forward much at all. But I can see why there is no official line published on it. We can, and do, help people to manage their affairs, along the lines suggested in the link you provided, and the Service charities with whom we work can often help with an unexpected financial catastrophe, but I can't think of a precedent where large consumer debts have been settled.


I was just wondering whether anyone had known of a situation where someone had gone bankrupt, and been able to soldier on.

CN :)
 

ugly

LE
Moderator
#9
I frankly cant see why soldiers should be discharged for failing financially. Not only does it show a lack of care but it also shows that the army would rather be shot of its problems than keep them in house, deal with them and retain valuable trained assets. Dumping someone onto civ street is no way to repay even mediocre service. It also leaves the mod open to being chased in the courts later!
 
#10
good post ugly its f@@king mad to give someone the boot if there in debt some of the stuff blokes do down town on the piss rip the ass !! you dont here people crying for there discharge papers, half the time they have caused the problems by messing blokes pay up, JPA hint hint
 
#11
ugly said:
I frankly cant see why soldiers should be discharged for failing financially. Not only does it show a lack of care but it also shows that the army would rather be shot of its problems than keep them in house, deal with them and retain valuable trained assets. Dumping someone onto civ street is no way to repay even mediocre service. It also leaves the mod open to being chased in the courts later!
The army is not a source of employment for soldiers who cannot manage their own finances, especially where such soldiers are precluded from operational deployments and get choice preference for LOA postings.

These two elements alone are evidence that the army does care - however I agree with your comment about rather being shot of their problems. I have applied for 1 administrative discharge on the grounds of indebtedness - which was ulitmately refused, nonetheless the soldier concerned was eventually discharged after a spell in MCTC for stealing 3 DII computers - to pay for his debts.

Furthermore - dumping someone on civvy street for mediocre service is more than adequate repayment - the army is a vehicle for those interested in serving their country to excel and to reap the benifits that the army offers - it is not a hive for wasters who are happy to exist on the back of others efforts.

As for the MOD being chased in the courts - on what grounds?
 

ugly

LE
Moderator
#12
As for the MOD being chased in the courts - on what grounds?
I expect some scum ambulance chaser will persuade a court to find that you have infringed their rights by removing their sole source of income without letting them repay their debt. This sort of thing didnt happen much 20 years ago but a squaddie in debt would end up in front of his OC. A good OC would find ways of keeping him in camp, ROP's extra gd duties etc a bad oc would fine him and add to the problem!
 
#13
Sammy The Cat said:
ugly said:
I frankly cant see why soldiers should be discharged for failing financially. Not only does it show a lack of care but it also shows that the army would rather be shot of its problems than keep them in house, deal with them and retain valuable trained assets. Dumping someone onto civ street is no way to repay even mediocre service. It also leaves the mod open to being chased in the courts later!
The army is not a source of employment for soldiers who cannot manage their own finances, especially where such soldiers are precluded from operational deployments and get choice preference for LOA postings.

These two elements alone are evidence that the army does care - however I agree with your comment about rather being shot of their problems. I have applied for 1 administrative discharge on the grounds of indebtedness - which was ulitmately refused, nonetheless the soldier concerned was eventually discharged after a spell in MCTC for stealing 3 DII computers - to pay for his debts.

Furthermore - dumping someone on civvy street for mediocre service is more than adequate repayment - the army is a vehicle for those interested in serving their country to excel and to reap the benifits that the army offers - it is not a hive for wasters who are happy to exist on the back of others efforts.

As for the MOD being chased in the courts - on what grounds?
Bang on, Sammy!

Litotes
 
#14
the_puple_dinosaur said:
good post ugly its f@@king mad to give someone the boot if there in debt some of the stuff blokes do down town on the urine rip the ass !! you dont here people crying for there discharge papers, half the time they have caused the problems by messing blokes pay up, JPA hint hint
By the time that soldiers in a financial mess come into contact with the CoC, it is invariably too late for any actions that would save the situation! The soldier whose case I quoted earlier owed four times his annual salary and had nothing to show for it... no house, no car, nothing. Most of his debts were on credit/store cards at more than 30% pa. There was no way out - and God knows I tried!

We could argue all day about whether Troopies should keep a better eye on their men etc, but do you want your Troopie living next to you? Thought not!

Litotes
 

ugly

LE
Moderator
#15
I dont disagree but perhaps attention needs paying to this during training in the same way that VD films were shown 20-30 years ago. I suppose that a return to the old days where you needed an OC's signature for credit at the NAAFI to buy a cassette player would be an imposition on these soldiers rights but we need to ensure that the service doesnt lose persons who only fault is poor financial awareness. Good soldiers need looking after sometimes, bad ones, well we all have dealt with those problems havent we. It gets worse as described earlier when they are married and cause manning issues on tours. Perhaps some form of mandatory savings plan could be instituted for those going through training. I still up to the month I left sent money home. I didnt leave with an instant pension or pay of but I owed no one either. I wasnt exactly a shiny shoe exemplary either!
Financial planning needs explaining to these troops when they join. We had a good chat from the Unit Pay Officer on bank accounts (a rarity for soldiers then) and encouraged to save and be responsible for ourselves. A bounced cheque would get you 7 days RoPs. Perhaps discipline is slipping and being noticed too late!
Only today on my local radio station a soldier was caught near Chichester selling ammunition!
 
#16
there is a little know act that can get you out of debt and railroad the bailiffs before they come to your home.

it's called an Administration order:
not an administrative discharge because you are still paying off your debt but at a much lower rate and no interest is applied.

how it works:

to apply for an Administration order, you need to have one county court judgment against you. It doesn't matter what it is for or who it was applied by, you just need one to prove you are in need of the Administration order' protection.

What Debts can i add to an Administration order?

Any Debt can be added to an Administration order, except the following. Tax, Fines, Council tax. mortgage arrears, and one or 2 others i cant remember.
Rent arrears can be added to an Administration order, but this is ill advised as your landlord can take away your home for stuffing him for the rent.

How does an Administration order work?

An Administration order allows you to ask the courts to administer your Debts to a sum of £4 or £5000 not sure what one is the limit. and once granted no-one can hassle you for the money again, as they are then in breach of a court order.

what does an Administration order do?

It gives control of your debts to the courts, if you have £4,000 of debts, you offer the courts to pay an amount you can afford to pay each month. this is paid every month direct to the court for about 3 years.
you can offer anything from 2p in the pound, to 10p in the pound, i found the people i have told about it, offer 3p to 5p in the pound. that makes your £4,000 of debts worth £80. you can not pay the £80 off all at once because you are telling the courts that you can only afford 5p in the pound and they might look at your case again if you can come up with £80 all of a sudden while pleading poverty

How do i apply for an Administration order?

Any CAB will do it for you for free and send off all the paperwork to the court, the court then sends all the people you listed, a form to object, the court then sets a date, if they get any objection, and you or a person that represents you must turn up for the hearing. i have never known any company to turn up for a hearing yet. and thats the only time it matters, if they fail to turn up and you do, then the courts grant you the Administration order.

if the objectors turn up, they have to prove you can pay and also prove good reason to the courts why their debt should not be included in the Administration order, The CCJ is the evidence you cant afford to pay, no matter who it's from. so the courts always find in your favor.

As for applying for this while in the forces? i dont see it as a problem because you are still paying your Debts and taken the responsibility of getting your debts under control without going bankrupt or declaring yourself insolvent, though the order is under the insolvency act, you are still managing your debt and paying them.

If your debt is over the £4000 you have to declare yourself bankrupt or insolvent, if your debt is less than £4000 you do not, and you still pay your debts off but at a much reduced amount. The MOD would have a hard time proving you unfit to soldier on if you are managing your debt and paying them off.
 

oldbaldy

LE
Moderator
#17
CornishNasty said:
oldbaldy said:
I suppose it will all depend on the both the soldier & the CO's view of him/her.
It has become something of a circular question, really. If someone comes to us (SSAFA), one of the first questions they ask is 'Will I be discharged if I go bankrupt'. All we can say, really, is 'it depends' - which doesn't move the situation forward much at all. But I can see why there is no official line published on it. We can, and do, help people to manage their affairs, along the lines suggested in the link you provided, and the Service charities with whom we work can often help with an unexpected financial catastrophe, but I can't think of a precedent where large consumer debts have been settled.
I was just wondering whether anyone had known of a situation where someone had gone bankrupt, and been able to soldier on.

CN :)
The whole thing seems a bit airey fairey to me as there seem to hard & fast rules. As Sammy says he applied for someone's discharge but was over-ruled by someone higher up the food chain. Had it been a different individual in that chair who knows what would happen!
Not much help & says you say we go in circles.
 
#18
Firstly and foremostly if someone is insolvent (more money going out then coming in) by law they have to be protected.

Secondly insolvency (commonly known as in debt) is very common, very easy to get caught up in (even if you are careful) and quite complex to deal with.

Gone are the days where a CO or OC could intervene and take over someones accounts/mail etc. This is breaking the law and could lead you into very serious trouble.

There are various ways to deal with the situation, an Admin order being the lowest official route, IVA being the next and finally bankcruptcy. Each has its own merits and I could write pages on which would be best dependent on circumstances. Best thing to do is research, there is enough info on the internet and on publish HMSO books to enable the most unknowledgeable person to get to grips with the basics.

There are other ways, but most are not really suitable.

With regard to bankcruptcy and being able to soldier on. I have known a soldier who has gone bancrupt and they did solder on, very successfully.

However I would suggest that it would depend on the soldier, what they did to get themselves into the mess and what trade/vetting they require. Insolvency must be reported so vetting could be affected.

With regard to booting the poor sods out, bit harsh I would say unless they got into the situation criminally.
 
#19
Redshaggydog said:
Firstly and foremostly if someone is insolvent (more money going out then coming in) by law they have to be protected.
What sort of person would fall within this protection, which law protects them and why do they have to be protected.

If this is the law, then it will be written down somewhere - and if it is as you claim then why do bankrupts not sue their administrators for negligence, and the administrator counter-claim against the lender for breach of collateral contract.

What a load of rubbish.

Every soldier I have ever known has had some form of debt - it's irresponsible indebtedeness that is the problem.
 

ugly

LE
Moderator
#20
Unless you have no mortgage or credit cards or finance then everyone has debt, that was the absurdity of asking the OCs permission for 200 DM stereo when he owed 3 times his salary on a house!
 

Similar threads

Latest Threads

Top