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A new insolvency procedure that will provide debt relief for people in England
and Wales who owe relatively little, have no income and no assets to repay what
they owe and cannot afford to make themselves bankrupt came one step closer last
week when the Tribunals Courts and Enforcement Bill was introduced into
parliament.
Debt relief orders are intended to give those who have debts of £15,000 or less,
assets of less than £300 and surplus income of less than £50 per month the
opportunity to apply for an order that will lead to the debts being discharged
after a year.
During that period, consumers who have a debt relief order will be protected
from enforcement action by creditors, and will be subject to similar
restrictions to bankruptcy.
Those whose financial circumstances improve during the order will be expected to
make arrangements to repay their creditors, and there will be civil and criminal
penalties for those who abuse the system.
It will only be possible to obtain a debt relief order by applying to the
official receiver through an approved intermediary and The Insolvency Service
has set up a working group comprising representatives from the advice sector to
look at the detail of how this will work.
Source:
Getting Paid
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