It’s seems a long time ago that we looked at insolvency and how a bankruptcy process server is involved. There are plans to make changes to the minimum and maximum amounts of money that determine whether a debtor can be allowed on a Debt Relief Order (DRO) or issued a bankruptcy creditor notice.
You can use a reputable process server to deliver the notice to the debtor. The changes are subject to a parliamentary review and if successful they will be enforced from October 2015.
Since 2009 there have been 140,861 people placed on a DRO. In this post we will examine the changes and what they mean for the average person needing to claw back debt from a non-payer. It was in 2009 that the current limit for a DRO was introduced, however the £750 minimum for a creditor to issue a bankruptcy creditor petition has been in place since 1986.
The Insolvency Service have said that the changes will reduce the number of people that will become bankrupt because it will be easier to obtain a (DRO) and harder to become bankrupt. So, what are the changes for a DRO and bankruptcy creditor petition:
- The previous maximum debt you could have and be placed on a DRO was £15000, this will be increased by £5000 to £20000.
- Your assets will be allowed to total £1000, this has been increased from £300. The allowance for a vehicle will stay the same and will not be counted as an asset if the value is less than £1000.
- The limit for disposable income will remain at £50 per month.
- You will no longer be able to force someone in to bankruptcy until they owe £5000, a big difference from the previous level of £750.
These limits will obviously impact on a process server. It is thought that 3600 more people that are struggling with debt will be able to move on to a DRO and therefore reduce the numbers facing bankruptcy for relatively low debt.
While some are in favour of the changes it has to be said that there are concerns that the increased limits will make it easier for some to avoid repaying debt, because the DRO is not a court based agreement and issuing a bankruptcy creditor petition remains an expensive option and of course less people will be able to take this option with their debtors.
You can be certain that Alpha 1 Legal Services (bankruptcy process server) keeps up to date with the current guidelines and legislations and will help you through your chosen course of action.