Changes to bankruptcy and Debt Relief Order rules

legal updates

Currently, if you are in debt to someone for just £750, they could petition to make you bankrupt.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

The Government have announced that from October 2015, the bankruptcy creditor petition limit will be raised from £750 to £5000.

Currently, if you are in debt to someone for just £750, they could petition to make you bankrupt. This £750 limit was set by Thatcher’s Government way back in 1986 which suggests this increase to £5000 is long overdue. The court fee to petition to make someone bankrupt is currently £280.

The Government are also raising the debt limit for Debt Relief Orders (DROs) which are essentially a cheaper and less complicated form of insolvency than full bankruptcy. Anyone on a low income and struggling with personal debts of up to £15,000 (subject to meeting eligibility criteria) can apply for a DRO to get those debts written off. From October, DROs will be available to those with debts of up to £20,000. DROs are processed through Approved Intermediaries and not through the courts like bankruptcies. At the moment, the cost of applying for a DRO is £90 which is considerably less than the current fee to make yourself bankrupt which is £545 plus £180 court fees.

Lawgistics members can contact us for advice and help regarding bankruptcy.

Octane FinanceFuel Your Finance

Octane Finance is the broker of choice for new and used car dealers nationwide. With our uncompromising service levels and our genuine and professional approach, you and your customers can trust us to deliver.

Nona BowkisHead of Legal Services / SolicitorRead More by this author

Related Legal Updates

Importance of taking your customers’ details!

Garages aren’t legally required to take a customer’s address before repair or sale, but skipping it can stall Torts notices and court action when vehicles are abandoned or not collected.

Bailiffs at the Door? Not So Fast: When ‘Debt Collectors’ Have No Power

A consumer decided our member ‘owed’ them money and sent in so-called heavies to collect. Here is why they had no legal power to enforce anything and what to do if a similar letter lands on your desk.

Motor Finance Consumer Redress Scheme

The FCA has launched a consultation on a motor finance redress scheme that could see average payouts of around £700 where key commission arrangements were not disclosed.

The FCA £1m Campaign: Better Late Than Never!

The FCA has launched a £1 million campaign to tell motor finance customers they can access compensation without claims firms or lawyers.

Don’t Get Soaked: The Habitation Checks That Stop Motorhome Rejections

Buyers are rejecting motorhomes for damp, leaks and unsafe cabins. Here’s what to inspect in the habitation area and why a simple pre-sale check can save you a costly Consumer Rights Act dispute.

Can You Claim What You Haven’t Lost? The ‘No Loss’ Principle Meets s19 CRA 2015

A live claim against a member raises a sharp question: if no money has changed hands and only deductions are in dispute, has the claimant suffered a recoverable loss?

To Repair or Not to Repair: that is the question

A customer drops off a car three months after purchase and asks for a refund. You might have a right to repair, but touch a spanner without clear permission and you could turn a winnable case into an unwanted rejection.

Get in touch

Complete the form to get in touch or via our details below:

Phone
01480 455500
Address

Vinpenta House
High Causeway
Whittlesey
Peterborough
PE7 1AE

By submitting this quote you agree to our Terms & Conditions and Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.