Rogers & Norton News
The limits for bankruptcy were last set in 1986 but with effect from the 1October 2015 significant changes are coming into force for Insolvency Law in the UK.
As of the 1 October 2015 the bankruptcy level on which an individual can be forced into bankruptcy is increasing from £750.00 to £5,000.00. With the new changes coming into force it is estimated that 2,000 fewer people each year are likely to be declared bankrupt.
The limits for statutory demands in corporate insolvency or winding up petitions will not be affected by the rule changes from the 1 October 2015 and the threshold of £750.00 will remain in place for the time being.
Maria Taylor comments “The changes will be of particular interest to any creditors who initiate bankruptcy proceedings on small debts. The new rules will only apply to bankruptcy petitions which are presented on or after the 1 October 2015. The message to any creditors who wish to pursue for less than £5,000.00 is to present their petitions before 1 October 2015 if they wish to pursue bankruptcy proceedings.
It is believed that the rule changes will be better for both debtors and creditors as there will be an increased chance of financial rehabilitation for those that find themselves in financial difficulty, except for those who wish to avoid bankruptcy for fear of their financial affairs being investigated”.
The alternative to bankruptcy petitions is Debt Relief Orders (DRO). These are cheaper to administer than bankruptcy petitions and with the new rules coming into force, more DRO’s are likely to be made. At present the rules relating to a DRO are that an individual must owe less than £15,000.00 and have under £300.00 in assets, this too is changing as the sums owed by an individual must be less than £20,000.00 and they must have under £1,000.00 in assets.
For more information on the changes or to pursue Bankruptcy Petitions or Debt Relief Orders contact Maria Taylor on 01603 675603 or e-mail firstname.lastname@example.org.