The government has revised thresholds relating to the level of debt required to petition for an individual’s bankruptcy and the qualification criteria to be considered for a Debt Relief Order (DRO).
The £750 minimum level of debt required to petition for bankruptcy has been in place since 1986 and ‘the protection it offered debtors had been steadily eroded by inflation over the last three decades’, according to Giles Frampton, president of insolvency trade body R3.
Whilst claiming that ‘it is right that the petition is increased’, he also described the new figure of £5,000 as ‘far higher than expected’ and added that ‘how the new threshold works in practice should be monitored closely’.
Other threshold changes see people with problem debt up to the value of £20,000 having the opportunity to enter into a DRO as an alternative to bankruptcy, an increase from the previous maximum of £15,000. The maximum value of assets an individual may have in a DRO has also been increased from £300 to £1,000.
If you would like advice on these changes and how they may affect your personal circumstances or any other personal insolvency issues, then we would encourage you to contact us and speak with one of our experienced Insolvency Practitioners who will be more than happy to provide guidance and advice. An initial consultation is provided free of charge. Contact us.