Borrowers to receive court protection for debts
Personal insolvency shake-up proposed in consultation
Lenders will be allowed to stop repaying debts if they receive a court order
under plans outlined in a radical government consultation released yesterday.
The paper, issued by the Ministry of Justice, will allow individuals who fall
into financial difficulty, such as loss of employment, to stop paying off loans,
credit cards and other debts if successfully applying for an ‘enforcement
restriction order’.
The Times reports that the proposals mark the biggest overhaul of
personal insolvency laws for years at a time when banks are preparing themselves
for heavy losses from bad debts.
Civil justice minister Bridget Prentice said the government wanted to allow
people who had run up debts ‘every opportunity’ to pay them off.
Further reading:
Retailers protected from impact of Trident
ruling
Darling to overhaul bank insolvency
rules