Baines and Ernst have welcomed the Governments plans to make it easier for people in financial difficulty write off their debts in Debt Relief Orders (DROs).
The Department for Business, Innovation and Skills has proposed changing the eligibility criteria for a DRO so that people with small pension pots can apply for the low cost debt relief solution. DROs were introduced last April as a low-cost alternative to bankruptcy with debts less than £15,000, assets of less than £300 rising to £1,000 if they had a car, and less than £50 surplus income a month.
But insolvency practioners had complained that the process excluded individuals if they had built a small pension pot over £300.
DROs were introduced last April as a low-cost alternative to bankruptcy with debts less than £15,000, assets of less than £300 rising to £1,000 if they had a car, and less than £50 surplus income a month.
But insolvency practioners had complained that the process excluded individuals if they had built a small pension pot over £300.
Ian Lucas, business minister, said: "Debt Relief Orders help people who would otherwise be trapped in poverty to get back on their feet. Following representations from independent money advisers, I’m proposing a common sense change to ensure that vulnerable people with a very small pension pot are treated fairly."
He said the government will consult on the proposed changes shortly.
Nick Pearson from Baines and Ernst commented “Since the DRO was introduced in April last year, Baines and Ernst have assisted about 800 people apply for DRO’s. We warmly welcome this proposed change as it will allow more people to benefit from this solution to their debt problems.