News

'Easy' bankruptcy plan condemned

The professional body which represents the credit management industry has criticised government plans to streamline the bankruptcy process.

The Institute of Credit Management (ICM) claims proposals from the Insolvency Service, which will allow debtors to apply for their own bankruptcy online, without needing to go to court, will make it too easy for those with financial problems to avoid paying their creditors.

The ICM fears such a move could lead to ‘unwelcome consequences’, with people opting for bankruptcy without considering its seriousness, leaving credit control firms to deal with the fallout of an increasing number of unpaid debts.

While welcoming the prospect of a reduction in delays in the bankruptcy system, the ICM said that, at the very least, some kind of face-to-face meeting with an expert was needed before anyone could declare themselves bankrupt.

The Insolvency Service believes that, by making the process easier, people may seek help more quickly, rather than allowing debts to continue to mount up.

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