Bankruptcy limit to increase from £750 to £5,000 – review your debtors
Business Minister Jo Swinson has announced an increase from £750 to £5,000 which is the amount of debt before a bankruptcy petition can be issued. The Debt Relief Orders (DROs) limit will also increase to £20,000.
The changes will make it easier for the financially vulnerable to manage problem personal debt and avoid them being moved into bankruptcy for low levels of debt.
Businesses and creditors need to consider debtor’s lists well in advance of 1 October 2015 when these changes take effect and begin procedures to recover overdue debt and to take advantage of the current rules. Much more debt will fall outside the scope of bankruptcy proceedings.
From 1 October 2015:
The minimum level of debt where you can declare being ‘bankrupt’ will rise from £750 to £5,000
The amount of debt to trigger a debtor’s application for a DRO will increase from £15,000 to £20,000.