Four recent changes to the insolvency regime

Published on October 20, 2015 by Crawfords Accounting

Recent weeks have seen four major changes made to the regime surrounding personal and corporate insolvency, which R3 – the Association of Business Recovery Professionals summarised in a series of tweets.

At the start of October, the organisation’s press office tweeted: “Lots of changes to the insolvency regime … bankruptcy, Debt Relief Orders, fees and business rescue all being updated.”

They went on to outline each change in more detail:


Corporate insolvency fees will now be estimated upfront, so an insolvent company’s creditors can see what work is due to be carried out by the insolvency practitioner.

Any fee-paying work above this must be approved by the creditors, otherwise no additional fees may be paid to the IP.


A major change to the bankruptcy limit saw the £750 minimum threshold to declare bankruptcy – which had remained unchanged ever since 1986 – raised substantially to £5,000.

The move means fewer personal insolvents should be forced into bankruptcy by their creditors, and corrects the oversight of the threshold not being linked with inflation.

Business Utilities

A campaign by R3 themselves has led to a change in the way business utilities are supplied during a period of corporate insolvency.

Suppliers are now not allowed to cut off insolvent business customers, as long as they are still trading as part of a corporate recovery attempt.

Debt Relief Orders

Finally, Debt Relief Orders, a less punishing form of personal insolvency than bankruptcy or even individual voluntary arrangements, have been given wider scope.

You can now enter into a DRO with anywhere up to £1,000 of assets and £20,000 of debt – up from £300 of assets and just £1,000 of debt before.

Together, all of these changes have given more security to personal and corporate insolvents alike – whether by making insolvency methods more available, or by protecting essential supplies while corporate recovery is in progress.

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