Back

Bankruptcy Threshold Rises From £750 to £5,000

As from 1 October 2015 the £750 threshold for a creditor’s bankruptcy petition against an individual has increased to £5,000.

money.jpg

This is the first increase for over thirty years and may result in a decrease in the amount of people being made bankrupt.

The increase has been made because this method of insolvency can have serious consequences for individuals, and the government wanted to ensure that it was only used for people with “sizeable debts”. The previous limit of £750 has been seen to be disproportionality low by today’s standards.

What Does this Mean?

It means that a statutory demand can no longer be served on an individual as a pre-cursor to bankruptcy proceedings for any debt less than £5,000, and that an alternative route is necessary e g issuing court proceedings, obtaining a county court judgment (CCJ), and thereafter looking to enforce payment, if payment is still not made and if an instalment arrangement has not been able to be agreed between the parties.

Please contact me on 01952 211024 for any further assistance/advice.