Online bankruptcy solution could cause havoc
May 10, 2008
At present the process of filing for bankruptcy is a long and arduous one, which makes people think twice before they decide to go down this road. However, from next April the government plans to introduce Debt Relief Orders, which will enable consumers to wipe out their debts through bankruptcy online without the need to go through bankruptcy courts. However, industry officials are concerned that this method could be open to abuse and could result in havoc.
The new system will allow those with under £15,000 of unsecured debt, surplus monthly income of under £50, and assets of under £300 to complete the process online without the need to go through courts. However, some are concerned that this could encourage some borrowers to declare themselves bankrupt even if they are not simply because of the ease and convenience of the process.
Consumers that fit the bill will be able to apply for the bankruptcy order online, and their debts will be discharged after one year. However, they do have to keep in touch with relevant agencies to advise them of any change in financial circumstances over the course of the year.
One industry official expressed his concern about the system, stating: ‘It will be difficult for the intermediary to carry out a detailed investigation into the affairs of the debtor because it just wouldn’t be worthwhile financially. Ordinarily, the trustee of a normal bankruptcy order has further powers to investigate the individual, more statutory muscle. This loophole may make it easier for people to break the law.’
It is thought that the penalties for trying to abuse the system could be severe, and could result in being charged with a criminal offence. Around fourteen thousand Debt Relief Orders are expected to be granted within the first year.
Related Articles
- Can online bankruptcies work effectively? The word bankruptcy send shivers up the spines of many people, and quite rightly so, as this is a process that can have a severe
- Bankruptcy could be the right answer for some borrowers The level of consumer debt and bad debt in the UK continues to rise, and many consumers have found themselves in huge levels of debt,
- Amnesty between banks and debt agencies to be announced According to a recent report next week will see the announcement of an amnesty between firms that sell debt plans for those in high levels
- How safe are you when you shop online? Britain has become a nation of consumers that like nothing more than total ease and convenience, and this has been reflected in the shopping habits
- Customers continue to enjoy online banking Research has shown that since online banking took off around a decade ago, this method of banking has continued to go from strength to strength,
Comments
Got something to say?