The Department of Trade and Industry (DTI) has begun consulting in order to try to find an alternative to bankruptcy for people who become over-indebted but who have a relatively low level of indebtedness with few assets and no surplus income with which to fund repayments over time via an Individual Voluntary Arrangement.
The proposals are that a low-cost non-court based scheme should be used, by which debt is relieved after a year for debtors with liabilities not exceeding £15,000 and assets not exceeding £300. The debtor will also need to have surplus income not exceeding £50 per month after meeting reasonable personal needs.
A list of creditors would be prepared and they would be informed of the making of the debt relief order and would have the right to challenge it and have it rescinded if appropriate. The order would prevent the listed creditors taking action to collect the debt.
Full details of the consultation can be found on the DTI website.
Insolvency Rule Changes Under Consideration
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