Announcement regarding possible changes to debt legislation
On 15 January 2015 it was announced that Business Minister, Jo Swinson stated that the following changes should be made to debt legislation. The changes will be subject to Parliamentary scrutiny before coming into force in October 2015.
- The amount of debt that can be covered in a Debt Relief Orders (DRO) should be increased from £15,000 to £20,000; and
- A creditor will need to be owed £5,000 instead of £750 before they can issue insolvency proceedings.
The £15,000 debt limit for a DRO was set in 2009 so the increase is natural and was needed to make sure that those who have little spare income and don’t own your home can try to escape the clutches of their financial position.
The £750 debt limit for bankruptcy proceedings was last revised in 1986. The figure should have increased before now but the leap to £5,000 appears to be excessive and we believe it may be reduced to a figure of £2,000 to £3,000 before October 2015. If it does not, we may see a flurry of bankruptcy petitions being issued before the changes come into force.
To read more, please go to: https://www.gov.uk/government/news/improved-help-for-people-struggling-with-problem-debt