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Online bankruptcy application may be introduced

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The Government has outlined proposals to allow individuals to submit a bankruptcy application online or through the post, rather than in a court.

The ‘Consultation on Reforming Debtor Petition Bankruptcy’ is aimed at making it quicker and easier for people to claim bankruptcy. Debts are a source of worry and stress, and many may never be able to pay back what they owe.

The proposal builds on research conducted in 2007 by The Insolvency Service. They found the main problem with the current system in England and Wales was the delay period, with debtors sometimes facing delays of up to three months between first contacting the court to the making of the bankruptcy order.

The proposed changes will directly decrease this waiting period as individuals won’t have to wait for court time. Petitions will be filed directly to an appointed decision-maker. These decision-makers will consider each online and postal bankruptcy petition, carrying out rigorous checks of the information to make sure the applicant meets the criteria for bankruptcy. They will also be responsible for informing the inquirer of their decision. Under the new proposals decisions may be reached within days rather than weeks or months.

However, debtors are still advised to seek professional advice about their situation and can withdraw their application at any time. There will also be a telephone support line to help people complete the application form.

Minister for Business Ian Lucas said:

“Bankruptcy should be the option of last resort for those burdened with unmanageable levels of debt, and this won’t change under our proposed reforms. However, once a person has decided that it is the only viable solution for their debt problems, these proposed changes will make it easier for them to proceed into bankruptcy.

“Many people delay making a petition for bankruptcy because they do not want to appear in court – meaning they can sink further into debt. We want to reduce that delay, while also freeing up valuable court time and resources to deal with other aspects of insolvency.”

The consultation closes on 8th February 2010.

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Written by Andrew Hodges

November 20, 2009 at 8:00 am

Posted in Comment, LinkedIn

Tagged with , ,

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