There are a number of changes slowly happening in relation to the rules surrounding insolvencies. A number of these changes are due to come into force on 1st October 2015 – including the change which increases the bankruptcy limits.
Currently, if an individual owes £750 or more, then one of their creditors can push them into bankruptcy. This figure of £750 has remained the same since the Insolvency Act was enacted back in 1986! Now it has finally been updated, and it will only be possible for somebody to be made bankrupt if they owe £5,000 or more in unsecured debt. Given the rising court fees (currently, a £280 court fee is required), and the amount now required to be paid as a deposit for the Official Receiver (£750), this new level makes more sense – as the costs of making somebody bankrupt before could have exceeded the debt that was owed!
However, there is currently no change to the £750 limit in relation to companies – so you can still push a company into liquidation if it owes £750 or more. There is still, however, a court fee of £280, and a deposit for the Official Receiver (of £1,250) to be paid.
There are a number of other changes to the current rules governing insolvencies coming in on 1st October 2015 – including provisions about the records that insolvency practitioners have to keep, requirements for fee estimates to be given, as well as an increase in the thresholds for debt relief orders.
Further changes are yet to come in relation to directors’ disqualification, the need to prove small debts, and the regulation of insolvency practitioners, amongst others – but as yet no dates have been announced for these changes, so watch this space!