Individuals declaring bankruptcy could be facing tougher measures by way of extended bankruptcy periods from 1 to 3 years if new proposals are accepted.
R3, the trade association for the insolvency industry has called for longer bankruptcy periods to allow for extended time for insolvency firms to investigate the financial affairs and conduct of individuals.
Proposals by R3 would also see bankrupts given time to pay the £700 bankruptcy fee in instalments rather than in one single upfront fee. They have also requested that the ‘most culpable’ individuals should be made bankrupt for up to fifteen years.
Significant increases in the use of Payday loans has contributed to the 200 per cent rise in personal insolvencies over the past decade. Despite a recent fall in the number of people becoming bankrupt, experts have warned this does not provide a true indication of the struggle many are experiencing with their personal finances.
Personal bankruptcies continue to fall but this is due to the increase in Debt Relief Orders (DRO) and Individual Voluntary Arrangements. (IVA)