Bankruptcy Level Has Now Increased to £5,000

From 1 October 2015 the minimum debt in respect of which a bankruptcy petition can be presented is increased to £5,000.

The previous bankruptcy limit of £750 had been in place since the modern insolvency legislation was implemented in 1986 and an increase has generally been considered overdue for some time. However, the significant increase to £5,000 is likely to have a particular impact on small businesses, which have previously used statutory demands as a cost effective method of prompting payment. This is likely to result initially in more irrecoverable debts and once the harsh lesson has been learned, in stricter credit terms for consumers of goods and services.

For more information about this or any other aspect of insolvency law, please contact Navinder Grover or Lee Donoghue in our Insolvency and Restructuring Team.