Government announces changes to debt relief access

The UK government has unveiled new plans for a debt relief system that will be easier to access for those with problem debt and low incomes.

Business minister Joe Swinson has announced that members of the public struggling to cope with repayments will be able to enter an amended Debt Relief Order (DRO) – the system that the public sector has in place to help address individuals' with holes in their personal finance.

DROs were set up with the intention of dealing with 'manageable' amounts of debt according to an individual's personal circumstances. 

Previously, the maximum sum that could be handled via a DRO was £15,000. Taking into account increases in basic living costs and household bills, this has now been increased by Mr Swinson to £20,000.

The vulnerability that debtors face in terms of the risk of involuntary bankruptcy has also been addressed by the new plans. Where those who are owed money were before able to force someone into bankruptcy over as little as £750, such measures will only now be able to be taken if an individual is owed £5,000 or more.

Mr Swinson explained that the overall aim of DROs has always been to provide an emergency facility for those who need it most, ensuring that hard working people who have fallen into debt through little fault of their own have enough support to get by.

He said: "Struggling with unresolvable debt can cause immense stress for families. These changes will ensure that our debt relief schemes are updated so that they still meet their original goal of providing access to those who need them."

The minister went on to say that bankruptcy is a measure that should be used as last resort and only where an individual has built up "sizeable" debts, which cannot be tackled via any other means.

If you feel like your debts are out of control and urgent action needs to be taken, do not hesitate to call us on 0800 019 2095.