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Debt -
Online bankruptcy could be abused - 15/05/2008
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A new form of online bankruptcy, that is yet to be introduced by the government next year, could be being abused, as it could lead to more people filing for bankruptcy, unnecessarily and could also lead to increased difficulties for authorities when it comes to verifying the financial details of the applicant.
The Debt Relief Order, will come into effect in Aril next year and will cater for those with under £15,000 worth of unsecured debt, who have less than £50 in surplus income each month and have assets of under £300.
An applicant will need to prove to officials that they cannot manage their debt repayments. Applicants will be able to file online, which means there will be no lengthy paperwork and no bankruptcy courts will be involved.
Once the application has gone through, it will be a year before debts are discharged.
One official stated: “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.”
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