NEWS...
Bankruptcy Plans 'Ill-conceived'
Proposals to transform bankruptcy to a simple online 'box ticking' exercise have been roundly condemned by the credit industry – led by Philip King, Chief Executive of the Institute of Credit Management (ICM).
He explained: "Applying for insurance or booking a holiday online is one thing, but becoming bankrupt online leaving a trail of unpaid creditors is not."
The government proposals are aimed at removing the stigma attached to bankruptcy, which is worthy. However, taking the process too far along the other direction Mr King described as: "inappropriate, unwelcome and likely to have seriously damaging consequences."
The consultation, led by Ian Lucas, the Minister for Business and Regulatory Reform, aims to create a new administrative entry process, where an individual can apply for their own bankruptcy without going through the courts. The government believes that this will remove – or at its most basic level reduce – the delay some debtors experience between presenting their petition and the order being made. It would also free up resources and reduce court times.
However, the credit industry is horrified by the prospect of the chaos these proposals could unleash.
"What is needed is a system whereby any debtor seeking insolvency is required to have a face-to-face meeting with someone who can properly explain the options and their consequences," added Mr King, "At the very least there needs to be an objective scorecard system based on the questions and answers given.
Fast tracking bankruptcy has been seen by many as introducing a loophole for the unscrupulous to take advantage of and doubts the ability of the proposed 'decision maker' to adjudicate fairly and consistently.
"This is should not be about 'insolvency factories' and I would very much like to know how the government are going to monitor the quality of the decisions made. A tick box is inadequate. Bankruptcy is a serious step and needs to be treated as such."
Original article courtesy of Credit Management.
