Bankruptcy and Debt Relief Order Thresholds Increased

Bankruptcy

From 1st October 2015 the bankruptcy threshold increased from £750 to £5,000.  Whilst this will undoubtedly be welcomed by debtors and accordingly the number of bankruptcies will reduce, the likelihood is that more small business may go out of business because they can no longer use the threat of bankruptcy to recover smaller debts. 

In addition, the cost of bankruptcy proceedings will also increase from 16th November 2015.  For a creditor to issue a Bankruptcy Petition the Court fee will increase from £280 to £355. In addition, Official Receiver’s deposits will increase by £140. 

Debt Relief Order (DRO)

Debt Relief Orders are a less drastic alternative to bankruptcy.  Under a DRO a debtor will agree to pay instalment payments, usually over a 12 month period, after which the debtor will be ‘discharged’ and the balance of any debts included in the DRO will be written off.  Debts which are included in a DRO also provide protection from creditors pursuing Court action.  

DROs are now available to those who:

  • owe less than £20,000
  • have spare income of less than £50 per month
  • do not own assets of more than £1000
  • have lived or worked in England and Wales within the last 3 years
  • have not applied for a DRO within the last 6 years
  • are not involved in any other insolvency proceedings at the time the application is made 

If  DRO is made, the debtor will be unable to:

  • borrow more than £500 without telling the lender about the DRO
  • act as the director of a company
  • create, manage or promote a company without the court’s permission
  • manage a business without telling those they do business with about the DRO

For further information on the threshold increases please contact Jackie Jordan


I have been practising in the debt recovery sector for over 30 years and joined Verisona Law in May 2012. We set up the debt recovery team the following February.

I have extensive experience of dealing with and advising on commercial and consumer matters from pre-legal action and the issuing of proceedings through to enforcement of Judgments, bankruptcy and winding up. 

The debt recovery team acts for businesses across all sectors including manufacturing, service providers and construction, as well as for individuals. 

Fellow of the Chartered Institute of Legal Executives

Jackie has previously acted for national and international clients in a wide range of sectors including IT, vehicle finance, insurance and debt purchase.

Jackie was awarded Credit Today Litigation Specialist of the Year 2003

  • Commercial and consumer claims from the issue of proceedings to Judgment
  • Enforcement of Judgments by Writ of Fi Fa, Orders to attend Court for questioning, Attachment of Earnings, Third Party Debt Orders, Charging Orders and Orders for sale
  • Bankruptcy and winding up proceedings
  • Debt purchase
  • Recruitment
  • Independent schools
  • SME businesses