The Government has announced that the financial threshold at which a creditor may present a bankruptcy petition against a debtor is to be increased from £750 to £5,000.
These changes will be brought in to force on 1 October 2015 and will be the first increase in the threshold since the Insolvency Act was brought into force in 1986.
Creditors owed less than £5,000 will need to consider alternative recovery procedures, such as bringing an action in the small claims track of the County Court.
The Government has also announced that the financial limit at which a debtor can obtain a debt relief order (a low cost alternative to bankruptcy) will be increased from £15,000 of debt to £20,000.
Note that these changes do not apply to the minimum debt for issuing a statutory demand against a company, which remains at £750.
For further information contact Neil Harrold, Partner at Hay & Kilner
Call: 0191 232 8345