Financial solutions company Think Money has welcomed new plans, announced by the Government, to ‘streamline’ the bankruptcy process – which could cut costs for both struggling borrowers and the taxpayer.
Business Minister Edward Davey has made proposals to allow struggling borrowers to apply for a bankruptcy order without going through the courts, which could help vulnerable people get the help they need with their debt problems faster.
Under the proposals, people applying for bankruptcy would be able to make an online application – or use a traditional paper application form – but would only have to attend court if there was a disagreement between them and their lenders.
Cutting the courts out of the bankruptcy process could reduce the cost: as it stands, £175 of the current £700 application fee for bankruptcy goes towards court fees.
A spokesperson for Think Money 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.”
References:
- http://nds.coi.gov.uk/content/detail.aspx?NewsAreaId=2&ReleaseID=421939&SubjectId=15&DepartmentMode=true
- http://www.thinkmoney.com/debt/news/government-planning-to-make-bankruptcy-simpler-0-4970.htm
