BusinessBusiness RecoveryOne-click bankruptcy sparks concern

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.

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