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Fast-track bankruptcy cases 'slower than expected'

Published on 3 Aug 2009 under category: legal

The number of fast-track bankruptcy cases is expected to be lower than predictions made when the system was set up.

According to the Daily Mail, it is thought that around 2,000 debt relief orders have been filed, as opposed to the anticipated 3,500 to 5,000.

Experts are saying the slow start up is because of a last minute change that meant people with pension savings could not opt for the 'quickie' bankruptcy.

Nick Pearson, external affairs director at debt adviser Paymex, told the newspaper: "A major impediment was last-minute guidance from the Insolvency Service saying that a person's pension pot would count towards their assets."

The scheme allows people with less than £300 in assets and a car worth up to £1,000 to file for the debt relief order, but pension funds fall are included in the £300 limit.

Official figures on the number of orders are expected to be released on Friday.

It is thought that older people may be opting for bankruptcy during the recession, with figures from the Insolvency Service studied by accountants Wilkins Kennedy showing that the number of elderly people being declared bankrupt in the last five years has risen by 164 per cent.