Bankruptcy and Debt Relief Order Thresholds Increased


From 1st October 2015 the bankruptcy threshold increased from £750 to £5,000.  Whilst this will undoubtedly be welcomed by debtors and accordingly the number of bankruptcies will reduce, the likelihood is that more small business may go out of business because they can no longer use the threat of bankruptcy to recover smaller debts. 

In addition, the cost of bankruptcy proceedings will also increase from 16th November 2015.  For a creditor to issue a Bankruptcy Petition the Court fee will increase from £280 to £355. In addition, Official Receiver’s deposits will increase by £140. 

Debt Relief Order (DRO)

Debt Relief Orders are a less drastic alternative to bankruptcy.  Under a DRO a debtor will agree to pay instalment payments, usually over a 12 month period, after which the debtor will be ‘discharged’ and the balance of any debts included in the DRO will be written off.  Debts which are included in a DRO also provide protection from creditors pursuing Court action.  

DROs are now available to those who:

  • owe less than £20,000
  • have spare income of less than £50 per month
  • do not own assets of more than £1000
  • have lived or worked in England and Wales within the last 3 years
  • have not applied for a DRO within the last 6 years
  • are not involved in any other insolvency proceedings at the time the application is made 

If  DRO is made, the debtor will be unable to:

  • borrow more than £500 without telling the lender about the DRO
  • act as the director of a company
  • create, manage or promote a company without the court’s permission
  • manage a business without telling those they do business with about the DRO

For further information on the threshold increases please contact Jackie Jordan

Jackie is a Fellow of the Chartered Institute of Legal Executives and qualified in 1999.

For over 30 years, she has worked in the debt and asset recovery field, winning awards for her handling of complex litigation. Jackie has extensive experience of commercial and consumer matters from pre-legal action and the issuing of proceedings, through to enforcement of Judgments, bankruptcy and winding up petitions.

Jackie was the Debt Recovery Team Manager with Blake Lapthorn (now Blake Morgan) and was with the firm for some 20 years.

Jackie joined Verisona Law in 2011 as Debt Recovery Manager. Jackie also project managed the implementation of the firm’s new practice management system, Peppermint, which went live in October 2013.

Due to the increasing workloads of the Insolvency and Business Turnaround team, Jackie was delighted to join the team in 2017 which will enable her to use her knowledge and experience gained over the years.

Jackie has experience in handling applications to court under the Insolvency Act 1986 and has an in depth knowledge of the Civil Procedure Rules in relation to insolvency proceedings.

  • 1991 Debt Recovery Manager at Blake Lapthorn
  • 2003 Awarded Credit Today Litigation Specialist of the Year
  • 2011 Joined Verisona Law as Debt Recover Manager
  • 2017 Joined the Insolvency & Business Turnaround team at Verisona Law
  • Statutory Demands
  • Bankruptcy Petitions
  • Individual Voluntary Arrangements
  • Winding Up Petitions
  • Applications to Court under Insolvency Act 1986
  • Claims under Insolvency Act 1986
  • Commercial and consumer claims from the issue of proceedings to Judgment
  • Enforcement of Judgments by Writ of Fi Fa, Orders to attend Court for questioning, Attachment of Earnings, Third Party Debt Orders, Charging Orders and Orders for sale

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