Following a consultation, the Department for Business, Innovation and Skills has recently announced changes that will come into effect from 1 October 2015.
The minimum level of debt for which a person who is owed money can force another person into bankruptcy will be increased from £750 to £5,000.
The Debt Relief Order eligibility criteria will also be changed to increase the maximum debt level from £15,000 to £20,000 and the asset limit from £300 to £1,000, plus a vehicle (worth no more than £1,000). No change will be made to the maximum level of surplus income allowed; this remains at £50 per week.
The increase may reduce the number of bankruptcies going forward but this will mean creditors having to look to other methods of legal action and enforcement to recover their debts, such as execution against goods and charging order.
For more information about this or any other debt or insolvency issue, please contact us on 0115 9888 777.