Bankruptcy could be made ‘cheaper and easier’

The Government has announced proposals to make the bankruptcy process simpler for struggling borrowers – which could help ensure more people with unmanageable debts get the help they need sooner rather than later.

According to the Insolvency Service, under the proposals – announced by Business Minister Edward Davey – people applying for bankruptcy wouldn’t necessarily have to go to court, as long as the borrower and lender had no significant disagreements.

Furthermore, people applying for a bankruptcy order would be able to do so online or using the traditional paper application form. At the moment, anyone wishing to go bankrupt must go through the courts – and pay £175 in court fees to do so.

It’s thought that ‘streamlined’ bankruptcies could lead to significant savings for both the borrower and taxpayer.

A spokesperson commented: “We would welcome a simplification of the process, as it would help to ensure more people get help before their situation has had a chance to deteriorate further.

” Borrowers should also keep in mind that there are often alternatives to bankruptcy – such as an IVA [Individual Voluntary Arrangement], which aims to prevent the sale of the home. Anyone with unmanageable debts should discuss all their options with an expert.”

Source: www.creditman.biz