Changes to Bankruptcy threshold and Debt Relief Order limit
In January 2015, Business Minister Jo Swinson announced that from October 2015, the Government intends to increase the minimum sum due for creditor bankruptcy petitions from £750 to £5,000 and the maximum level of debt for which a Debt Relief Order ["DRO"] can be obtained from £15,000 to £20,000.
Whilst the present creditor threshold of £750 is out dated and an increase has been long overdue - the threshold was last revised in 1986 - an increase of just under 700% has come as a surprise, especially given that at one stage, it was understood that the Insolvency Service had proposed an increase to £2,000.
The existing DRO debt limit was set in 2009. An increase to £20,000 is lower than some had called for, with some campaigners wanting an increase to £30,000. The increase in the debt limit to £20,000, together with the increase in the asset value limit to £1,000, is expected to increase the number of people able to consider DRO by an additional 3,500 a year
Posted on: 12/02/2015
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