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Proposals to simply the bankruptcy process have been announced by the Government this week. These proposals outlined by Business Minister Edward Davey are aimed at streamlining the bankruptcy process for individuals whilst also safeguarding debtors.

The Government wants to introduce a more efficient system that will both speed up and lower the costs currently involved in becoming bankrupt. Under the new system people would be able to apply for bankruptcy without having to go to court in cases where there is no disagreement between themselves and their creditors.

The changes being proposed are -

• Bankruptcy applications can be made electronically to a specially appointed Adjudicator who will decide on the outcome providing both parties agree. In this way only cases where there are disputes would be dealt with by the Court.

• Individuals who wish to apply for bankruptcy have the choice of submitting either paper or electronic applications. They also have the option to pay the associated costs in instalments.

• Lenders who are looking to instigate bankruptcy proceedings will first have to take all reasonable steps towards reaching an amicable agreement on payment of the debt. 

Outlining the proposals Mr Davey said 'Courts have an important role to play in bankruptcy and winding up applications where there is a real dispute between parties. But in simpler cases where there is no real disagreement a more streamlined route into bankruptcy is needed.'

'These reforms should help to deliver better outcomes, reduce unnecessary burdens on creditors and debtors, and bring substantial savings for the taxpayer.'