The government announced before the dissolution of parliament for the general election, that it would increase the threshold for bringing a bankruptcy petition from £750 to £5,000. This means that if a person’s liabilities are less than £5,000, it would not be possible to recover the sums owned by that individual by the way of bankruptcy or by issuing a statutory demand. This is the first reform of the minimum level of debt that could force a person into bankruptcy since 1986. Additionally, it has been announced that the debt relief order’s (DRO) limit would increase from the current level of £15,000 to £20,000. The individual would be able to apply for DRO if their assets are less than 1,000 (currently £300).
The planned changes are expected to come into force from 1st October 2015.