Pensions excluded in revised insolvency rules
Amendments to the insolvency rules on 6 April will see personal insolvency option debt relief orders exclude pensions as an asset
INSOLVENCY RULES have been amended to exclude pensions as an asset in personal insolvency cases, a move welcomed by business minister Edward Davey.
The rule changes are applicable to debt relief orders (DROs) which sees an individual’s liabilities reduced and paid back over a contracted period of time. The DRO user must owe less than £15,00, and have assets and surplus income of less than £300.
Previously DROs included pensions as an asset – an unusual rule considering other personal insolvency options, such as bankruptcy, did not.
Insolvency practitioners and debt advise businesses were concerned the DRO was excluding those it was designed to help.
Davey, (pictured) said: “The insolvency regime exists to free people from unmanageable debt and support them in making a fresh financial start, subject to some conditions.
“This common sense change will allow those who were previously unable to access a debt relief order, because they had accrued some rights to a pension, fair use of the insolvency regime.”
The amendment to the Insolvency Rules 1986 will take effect on 6 April.