Qualified advisers answering your
Financial Questions
call 0800 092 1245

Rules on Bankruptcy and Debt Relief Orders to change


People who are considered “to poor to go bankrupt” with up to £20,000 debt will now be able to use a Debt Relief Order to enter insolvency.

Debt relief orders were introduced in 2009 to allow people with fewer assets the chance to enter insolvency without the fees involved in full blown bankruptcy. New rules introduced by the Insolvency Service have now increased the maximum amount of debt that can be covered by these plans, from £15,000 to £20,000. This means 3,600 more people a year will be able to use the service, the Government have claimed.

This move has been welcomed by debt charities as a solution for people who are too poor to go bankrupt. Official figures show that there have been 140,861 Debt Relief Orders since they were introduced in 2009.

The minimum amount in which you can be forced into bankruptcy is also being raised from £750 to £5,000. The limit was last set in 1986 and the new rules will come into effect in October this year, Business Minister Jo Swinson announced.

Jo Swinson said:
"Struggling with unresolvable debt can cause immense stress for families. These changes will ensure that our debt relief schemes are updated so that they still meet their original goal of providing access to those who need them. They also ensure that bankruptcy, which has the most significant consequences, is reserved for those with sizeable debts."

"Bankruptcy is considerably more expensive that applying for a debt relief order and I was made aware that there may be people who are unable to apply for bankruptcy but have very low assets and income and creditors would therefore not be likely to receive any payment"

Need financial advice?

If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details