Show Me The Money
The bankruptcy limit is going up to £5,000 in October. (Assuming the same Minister is in post!)
Currently, you can serve a Statutory Demand on someone for any sum over £750 and if they can’t pay, you can petition for his or her bankruptcy.
It’s rather silly, therefore, that the cost of making someone bankrupt is getting close to £1,000 in legal fees, with legal costs on top of that (unless you do-it-yourself).
The threshold figure of £750 was set in 1986, and some quick research suggests that would equate to between £2,000 and £3,000 today, so this rise in the limit is a pretty big jump anyway.
The introduction of the Debt Relief Order in 2007 was very helpful and this new rule should be seen in this light.
If you need practical advice for dealing with debtors or creditors contact the Company Commercial team at Bennett Griffin for assistance.
The information contained in this article is for general guidance only and is not intended to be legal advice. Professional advice should always be taken on the application of the law in any particular situation.