On 1 October 2015, the threshold debt needed for creditors' bankruptcy petitions was raised.
On the above date the Insolvency Act 1986 (Amendment) Order 2015 amends section 267(4) of the Insolvency Act 1986. The effect of this is that the threshold debt needed for creditors' bankruptcy petitions (known as the bankruptcy level) increases significantly from £750 to £5,000.
The service of a statutory demand and issue of a bankruptcy petition is a useful method of recovering outstanding monies. However, a creditor will now have to wait until the debt has reached a much higher level before it can pursue a debtor in this manner.
If you are wishing to pursue a debt against an individual that is below the bankruptcy level, you are able to take action against an individual through the Small Claims Court. However, only in limited circumstances will legal costs be recoverable for sums in dispute under £10,000.
This is not legal advice; it is intended to provide information of general interest about current legal issues.