Government reviews personal insolvency framework
Have you ever found yourself in financial distress, struggling to juggle the bills and balance the books? Or perhaps you have supported someone with their debt issues.
The Government is looking for input from anyone who has been touched by severe money problems as it reviews the personal insolvency framework for England and Wales.
Anyone with any experience is being asked to share their views and give evidence on the effectiveness of the framework.
A call for evidence seeking stakeholders’ views and evidence on the framework and whether it serves the needs of debtors and creditors in the 21st century was announced on Monday, 5 July.
The last fundamental review of personal insolvency was carried out 40 years ago. The Government wants to see how the current set-up supports those in financial difficulty and how it is funded.
Fair system needed
Business Minister Lord Callanan said: “Any vibrant economy relies on people spending money, and for many, using credit is an important part of that. However, in situations where people are unable to repay borrowed money, it’s vital that we have a system that is fair to both them and their creditors.
“Our current personal insolvency framework has been in place for many years and so it is only right that we examine whether it works as effectively as it should in today’s world.”
The Government would welcome responses from people who have experienced debt, creditors and their representatives, trade bodies, debt advisers and charities, insolvency practitioners, recognised professional bodies, academics, and any other interested parties. Responses will help to inform the understanding and identify whether reforms are needed.
Peter Tutton, Head of Policy, Research and Public Affairs at StepChange Debt Charity, said: “We know from our clients that personal insolvency remains poorly understood, a source of potential fear and perceived stigma, and in many cases expensive to access at the outset and risky if circumstances change.
“We look forward to using the evidence from our client experience to help inform the review. We would see success as delivering an agreed pathway, supported by Government, towards a personal insolvency framework that works with debt advice to deliver sustainable, affordable and fair debt relief for those who need it, under a well-regulated and effective supervisory regime.”
Submit your responses
Eric Leenders, UK Finance Managing Director, Personal Finance, said: “As part of a highly regulated sector, our members work closely with their customers, and with debt charities, to provide tailored support to those facing into financial difficulty. This support always aims to help customers without the need for insolvency solutions. However, where such solutions are used, they should be accessible, understandable and fair for both borrowers and lenders. As such we welcome this review and will be happy to contribute to the call for evidence.”
Responses for the call for evidence must be received by 24 October 2022.
If you have any concerns about your finances, talk to a member of our team.
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