Bid to curb misuse of bankruptcy
LEGISLATION that can force people owing as little as £750 into bankruptcy is to be reviewed.
The threshold at which a creditor can petition for bankruptcy has remained unchanged since the Insolvency Act came into force in 1986. Announcing an autumn consultation on raising it to £3,000, Business Minister Ed Davey said: “To be able to threaten someone with bankruptcy for such a small amount is disproportionate.”
James Falla, of beatmydebt.com, said: “This would stop the threat of bankruptcy being used as a debt collection tool where it is clearly not appropriate to do so.” The number of personal insolvencies has risen sharply since 2005 and hit a record 135,089 in England and Wales last year.
Numbers are likely to climb even higher this year.
Britons collectively owe £1.453trillion.