Proposals to change the face of bankruptcy
The Insolvency Service has published a document proposing significant changes in the way bankruptcies are handled.
The consultation document puts forward changes such as removing the court process debtors have to go through and replacing it with an administrative one.
They also want to remove the facility for the Official Receiver to grant early discharge in less then a year.
The aim is to create a more efficient process for people when other forms of debt relief aren't appropriate, where the person can apply for their own bankruptcy without going to court, helping to reduce the time between presenting their bankruptcy petition and the bankruptcy order being made.
It's expected that the cost of the new process would be less than current court fees, which are £510.
Kevin Still, Director of debt solution provider EuroDebt, commented: "The bankruptcy figures over the last two years have remained fairly constant with regard to the proportion of bankruptcies where it is the debtor that petitioned for their own bankruptcy.
This figure stands at around 87 per cent of all bankruptcies in England & Wales. IVAs remain slightly more popular in terms of formal debt solutions.
Debt Management Plans [DMPs] dwarf these figures. If the delays at the court are reduced then this will be a major step forward, though we will wait and see whether the new process is less costly for consumers with unmanageable debt problems'>debt problems."