Changes to DRO and creditor bankruptcy limits

Changes to DRO and creditor bankruptcy limits

The Insolvency Service has today released an analysis of the responses it received in respect of its consultation/call for evidence relating to:

  • the effect that debt relief orders (DROs) have had since they were first introduced in April 2009, and whether any changes could be made to improve access and how they work
  • whether changes should be made to the level of debt above which someone owed money can ask the court to make a debtor bankrupt, the current level of £750 having been set in 1986.

Having regard to the responses received, Business Minister Jo Swinson has today announced that in order to enable easier access to debt relief for financially vulnerable people:

  • the maximum level of debt that can be covered by DROs will increase from £15,000 to £20,000. Other changes have been announced in respect of DROs
  • the minimum level of debt for for which a creditor can commence bankruptcy proceedings is to increase from £750 to £5,000

It is understood that the following Parliamentary scrutiny, these reforms will come into force on 1 October 2015, with the changes to DROs set out i

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About the author:

Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.

Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.