One-click bankruptcy sparks concern
Fears are growing over new bankruptcy procedures that could allow those in debt to write off their obligations with a click of a mouse
Moves to open up insolvency methods called debt relief orders will mean
individuals could begin bankruptcy proceedings for themselves or others online.
There are concerns individuals may use the scheme against people they have a
grudge against.
Mike Gerrard, insolvency partner at
Grant Thornton,
believes people may ‘get sloshed’ and think it is a ‘good idea to start
bankruptcy proceedings’. ‘One of my concerns is that you don’t have to go to
court, you could actually make someone like your old headmaster bankrupt. No-one
will know until they receive a letter,’ he said.
Although the policy will reduce the burden on courts and costs the debtor
£100 compared to the current £500 to file proceedings, there is a fear that
personal insolvency will be taken too lightly.
The Insolvency
Service is currently working on the plans, expected to be introduced in
April 2009.