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Will New Bankruptcy Thresholds Leave Creditors Out Of Pocket?

Things in the debt world are about to change. If you are thinking of pursuing someone for money owed, you may have to move quickly to get what you're owed.

Bankruptcy

Last month, the government announced that they were changing the threshold on debt, altering the amount needed for a creditor to bring a bankruptcy petition. This is also known as the bankruptcy level.

In addition to this, debtor friendly alterations are being made to the eligibility criteria for debt relief orders (DRO).

Autumn Debts?

The Insolvency Service (IS) proposed that from the 1 of October 2015, if you are a creditor and you want to petition an individual's bankruptcy, you would need to be owed at least £5,000. Previously this figure was £750.

This is problematic if you are owed below £5,000 as you won't be able to petition for the debtor's bankruptcy after October 1.

More Changes

Other things that are set to change are the eligibility criteria for individuals who wish to get a DRO, seemingly making it easier to obtain.

The change in figures is a reflection of the cost of living today according to the Insolvency Service, and the corresponding debt that comes with it. The increase of £750 to £5,000 is a push for creditors to not push for bankruptcy proceedings to collect small levels of debt.

On the back of this news, it's important to contact a solicitor as soon as possible to start a claim against a debtor if it is below £5,000. You could potentially miss out on money that is rightfully yours.


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Dated: 11/03/2015

Author: Luke Corcoran



Landlord - Residential Letting Contract


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