Attention creditors: petition threshold to increase on 1st October 2015
This is a reminder to creditors that, from 1st October 2015, the minimum threshold to petition for a debtor’s bankruptcy will increase from £750 to £5,000.
So if you’re owed less than £5,000, but more than £750, your bankruptcy petition will need to be issued by 1st October 2015. Otherwise, you’ll need to consider alternative methods.
The changes do not affect petitions against a company. Section 123 of the Insolvency Act 1986 remains unchanged.
The eligibility for a Debt Relief Order also changes on 1st October 2015.
From that date:
- The maximum amount of debt that can be covered will increase from £15,000 to £20,000.
- The asset limit will increase from £300 to £1,000.
The maximum surplus income a person can have to qualify for a Debt Relief Order will stay at £50 a month.
What do I think?
It comes as no surprise that it’s thought the changes will result in a drop in bankruptcies.
It remains to be seen how this will affect smaller business and individuals who may be owed small amounts by sole traders.
The threat of bankruptcy and the serving of a statutory demand often prompts payment from an individual. Creditors will now have to consider alternative ways of extracting payment.
Need advice? We can help you
Please call Chris Adams on 01482 324252.
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