At present if you owe a debt of more than £750 they can apply to the courts to bankruptcy you.
From 1 Oct this will rise to £5000.
So if you owe less than £5000, then a creditor CANNOT Bankrupt you.
"The rise in the creditor bankruptcy petition threshold is welcome, although £5,000 is far higher than expected. It is right that the petition be increased: £750 was an entirely inappropriate level and the protection it offered debtors had been steadily eroded by inflation over the last three decades." Giles Frampton, president of R3
DRO Debt Limit
At present the maximum debt you can have is £15,000 over that then bankruptcy is the only option.
From 1 October the maximum will rise to £20,000, thus enabling some 3,600+ more people with low level debt to use DROs instead of the more expensive and onerous bankruptcy process.
"The limit of £15,000 of debt was set in 2009 so we’re delighted the Insolvency Service have brought this bang up-to-date and we’re pleased to hear it will be reviewed again in 2017. We had campaigned for the limit to rise to £30,000 which would have seen more than half of our clients able to afford this debt solution. However, the line had to be drawn somewhere and £20,000 is a good start". Matt Barlow CEO of CAP
Assets in a DRO
At present the maximum value of asset you can have is £300 plus a car not worth more than £1000. So a combined maximum of £1300
From 1 October you can have a total of no more than £1000 in assets, PLUS you are allowed a car providing it is not worth more then £1000 (so the top limit for assets plus car will be £2000)
[DQ Hint: Remember lots of basic household items such as cutlery, crockery, cookers, televisions, beds or furniture do not count as assets. The value of your assets is worked out using the [url]resale value[/url], not how much the item was worth when you bought it, unless it is brand new]
DRO Surplus Income
This is remaining unchanged.
If you have a surplus of more than £50 then you will not be allowed to enter into a DRO.
If your surplus goes above £50 a month ON A REGULAR BASIS, then the DRO may be cancelled
Hundreds more people considered to be "too poor to go bankrupt" will shortly able to use find a solution through DROs.
If you are considering a DRO or Bankruptcy as a solution to you debt problems you will need to show that you have sought impartial professional advise for a qualified DRO Intermediary
We would recommend you contact one of the following
The Money Advice Service: Free & impartial money advice, set up by government that aims to signpost you to appropriate organisations that may be able to help you. You can contact them on 0300 500 5000
PayPlan: Is a national organisation with approaching 20 years of experience in dealing with all kinds of financial situations, no matter how bad they are.
Their advice and help starts with a simple phone call to 0800 280 2816
NDL: Is an organisation that advises you on solutions that are available to you, you can contact them on 0808 808 4000
StepChange (formerly CCCS) Is an organisation that advises you on available solutions with your financial problems. You can contact them on 0800 138 1111
Citizen Advice Bureau (please see your local phone book or on line to find your local CAB
All the above services provide FREE services and they do not charge for that advice.
Want to talk to someone confidentially, without obligation and free of charge?
Abbreviations used in DQF
My advice is guidance only, if you want the law then consult a lawyer!
(c) All Spelling mistakes are my own design, infringement of them may result me sulking!