TSP Dispute Resolution Team leader Sharon Auton explains some of the changes to bankruptcy proceedings which came into force on 1 October 2015.
The minimum amount of indebtedness required before a petition can be issued for a debtor’s bankruptcy is being increased from £750 to £5,000 on 1 October 2015. This is the first increase in the threshold amount since 1986 and is likely to have an impact of the number of bankruptcies in the forthcoming years.
The increase in the threshold for creditors’ bankruptcy petitions is well above inflation and reflects the intention to dissuade creditors from using bankruptcy to collect relatively low levels of debt.
The maximum debt level at which people can apply for a Debt Relief Order will also increase, from £15,000 to £20,000 on 1 October 2015. Individuals will be eligible for a Debt Relief Order if:
- they owe up to £20,000 (rather than £15,000 at present);
- they have assets worth up to £1,000 (rather than £300 at present); and
- they have a maximum monthly surplus income of £50
The new monetary limits for Debt Relief Orders are to reflect the cost of living today and corresponding debt. However, the monthly limit on a debtor’s maximum surplus income has not changed.
Other changes on 1 October 2015 include:
- Insolvency practitioners’ record-keeping requirements simplified
- Approved fee estimates required
- Protection of essential supplies
- Power for administrator to bring claim for fraudulent or wrongful trading
- Power for liquidator or administrator to assign causes of action
- Application of proceeds of office-holder claims
If you find yourself in an insolvency situation and need help please do call the TSP Dispute Resolution team. They have advised many individuals who find themselves in this situation. Sharon can be contacted on 012060 217043 or by email at firstname.lastname@example.org .