Changes to the Insolvency Rules from 1st October 2015

Since 1986, a Creditor has been able to present a Bankruptcy Petition for an uncontested minimum amount of £750.00 or more. Following a Government review this threshold has now been increased to £5000.00 effective from 1st October 2015, the first increase in 30 years.

According to statistics, approximately 20% of the Bankruptcy Petitions presented in 2013-2014 were for less than £5000.00, and the likelihood is that there will be fewer Petitions presented as a result of the increase. Creditors may already have considered that the Court fee together with the Official Receivers Deposit precluded the issue of a Bankruptcy Petition for sums due less than the new limit, therefore this change will have little effect in the collection practices already adopted by Creditors.

At the same time the Government has increased the threshold for debtors applying for a Debt Relief Order allowing those with debts up to £20,000.00 (previously £15,000.00) and assets of up to £1000.00 (previously £300.00) with a monthly surplus of £50.00 (remains unchanged) to seek this option, reserving the sanctions of Bankruptcy to those who have more substantial debts.

The Government has no plans, at least at present, to increase the minimum threshold for Creditors to present a Winding Up Petition which remains unchanged at £750.00.

For further information concerning this article please contact Jackie Ray on 01494 478660 or email jar@blasermills.co.uk