Consultation to remove court role in insolvencies launched

THE GOVERNMENT has today launched a consultation to remove court participation in bankruptcies.

Business minister Edward Davey (pictured) announced proposals for a streamlined bankruptcy and company liquidation system, which eased burdens on the UK courts.

MP Davey said: “Courts have an important role to play in bankruptcy and winding up applications where there is a real dispute between parties. But in simpler cases where there is no real disagreement, a more streamlined route into bankruptcy is needed.

“These reforms should help to deliver better outcomes, reduce unnecessary burdens on creditors and debtors and bring substantial savings for the taxpayer.

“It is essential that we get the detail right, particularly in relation to the level of safeguards required to ensure better results for debtors, while respecting creditors’ rights. That is why I strongly encourage all interested parties to respond to this consultation.”

The consultation entitled ‘Reform of the process to apply for bankruptcy and compulsory winding up petition reform’ includes provisions for online bankruptcy applications. Submitting false information will become a criminal offence and debtors could pay a bankruptcy charge in installments – it currently costs £525 to file for the insolvency process.

Justice minister Jonanthan Djanogly, said the government wants to create an “efficient system” where courts are used as a last resort.

The consultation is due to close on 31 January 2012.


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