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22 Jan

Posted in
General news

Harder to become bankrupt

It’s Becoming Harder to be Made Bankrupt

The government has announced that the figure at which someone can be forced into bankruptcy will increase from £750 to £5,000 from October 2015.

The limit has not increased for 30 years, so was far out of date. In fact, making someone bankrupt today costs at least £2,000 (if you include legal costs and the amount that has to be lodged with the Court as a deposit, which is £1,030).

Based on this, it was disproportionate to make someone bankrupt for only £750.

Personally, I do think it is a good thing that the level has increased. It will also stop what happens when some large institution starts a bankruptcy process without much thought into making someone bankrupt and the recipient ignores the letters.

The only negative is that more bailiffs will now be used for levels of claims up to £5,000. Unfortunately most householders do not know their rights and most bailiffs know the rules inside out.

However, one escape for debtors (“debtor” is the term for someone with the debts) is that they can still make themselves bankrupt at any level even for £750, and this does stops bailiffs.

Debt Relief Order (“DRO”) limits will also change increasing someone with debts of up to £20,000 from £15,000 being able to use this instead of bankruptcy.

If you would like to know more about bankruptcy please visit our FAQs page or contact us today for expert advice.


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