- House of Commons
- United Kingdom
To the House of Commons:
The petition of Elspeth R
Our current rules regarding banking and bankruptcy need urgently revising.
Since the downturn, there is very strong negative public feeling towards financial institutions. There is much anger at the bonuses and that public money has bailed out highly paid bankers of a crisis which we are suffering and paying for in many senses, whilst banks create debts for private customers as well as the country as a whole.
Banks extract huge fees from thousands of personal customers for going only a little over a limit, and these fees have no cap. Fees of up to £100 per month are taken automatically and there are cases where these have made those in hardship have four figure fees whilst investigations go on. This can lead to loss of banking facilities and demands for further money from banks. The High Court test case was a very drawn out way of looking at this issue, which is clearly deeply unbalanced. It is entirely in the bank's favour, and the furore around the unsuccessful case shows how strongly popular feeling is about this matter. Banks make over £1 billion each year through these fees, on top of their other profits.
Bankruptcy laws have been tightened without public consultation or even widespread knowledge; most websites on debt don't mention it, including the government's. In this time, debt has become very common. Debt is seen as bad but it is often the only way to improve circumstances, such as setting up business or paying for an education. Debt is also a result of materialism and consumerist society. Government cuts make this worse, especially to legal aid and for medical treatment.
Bankruptcy laws have been put in place by those who are well off. The previous £50 free spending money a month was tight – but the current £10 for 3 years shows no understanding of modern life or poverty. £10 per family member shows no understanding of single people and expects the burden and shame of bankruptcy to be spread across a whole household. And for a person already under pressure, to not have any kind of relief asks for other problems, such as depression. £10 a month means a single coffee a week. It won't buy a meal out; it won't allow you to leave your home town. It isn't even enough to rent a DVD each week. It isn't enough for a television licence. Bankrupts may have to sell anything of value. The law does not understand how things like DVD players, music and especially instruments, or computer games are vital. Whatever our financial circumstances, we all need a richer life; and after and during all the indignity and stress of debt, having pleasures and passions taken away is wrong and unfair.
Being without a bank account is very hard in today's society – even benefits want to pay into one. And anything extra the insolvent earns during those 3 years goes to the creditor, meaning that doing better financially gives them no relief and no benefit. Insolvents are even asked to pay to become insolvent, and are publically shamed by having their bankruptcy published.
Our whole ethos is built up on a contractual debt, blame and punishment that enters into every part of our existence. Banks and law unfairly control much of our society. The recurrence of recessions and other problems suggest that our current systems are not the way, and invite us to urgently look again – not try to continue much as before.
The petitioner(s) therefore request(s) that the House of Commons urgently revisit these rules and the ethos behind them.
One should not have to pay to declare oneself bankrupt. It should last and have effect for only one year. There should be no public publication and shaming. The allowable personal budget should return to £50 per month, and to rise appropriately with inflation. Bankruptcy should not affect members of a household or family, only the persons directly filing for it. Creditors should not be able to take extra monies earned in this time.
There should be a system in place to allow bank accounts for bankrupts without further fees. There should be no ban or public offices or other roles. Personal bankruptcy should not stop a self employed business and vice versa; this is the livelihood and will mean no money for the person filing as bankrupt. Creditors should not be able to force borrowers into bankruptcy, particularly when the creditors have created the debt, such as with banking fees or aggressive lending.
Student loans of all kinds should be covered by bankruptcy; the 2004 ban should be repealed as should the March 2011 legislation. Having to attend a court hearing should be stopped – this is extra stress and cost (to attend) and quite often humiliation. Information from debt advice centres should also be looked as many of these encourage insolvency as a way of freedom, and do not present the facts properly.
The law should protect genuine people from large preying creditors without encouraging non payment from reckless borrowers.
Bailiffs should stopped. It is unsupportable to be harassed in your home for goods not related to the creditor's claims.
Banking fees should be abolished. They are not necessary; they are only partly as a deterrent. If one goes over your account's limit, the account should simply not allow further withdrawals until further funds are put in. Banks should be banned immediately from following up fees with demands to further repay overdrafts. where unreasonable fees have been charged and or hardship has been caused, these fees should be returned to customers.
The blame, debt and contract system of out society needs to be revisited and debate begun and implemented about a fairer way forward. And the petitioner remains, etc.
The Review Banking fees and Bankruptcy rules petition to House of Commons was written by ElspethR and is in the category Consumer Affairs at GoPetition.