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.
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