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Government publishes response to its call for evidence on personal insolvency review

Government publishes response to its call for evidence on personal insolvency review

News Release issued by the COI News Distribution Service on 19 July 2011

Business Minister Edward Davey today published the Government's response to the call for evidence concerning its review of debt advice and personal insolvency.

The Government is committed to making sure that debt advice is accessible to all, including the most vulnerable. It is also committed to improving standards concerning debt management.

Following consideration of the responses received, the Government has proposed:

* the Money Advice Service should perform a central role in the coordination of debt advice, and should research and develop a delivery model for debt advice
* development of a protocol setting out what to expect from a Debt Management Plan;
* strengthening voluntary codes of forbearance where debtors need a breathing space to seek debt advice or recover from sudden income loss; and
* a consultation on how to facilitate access for bankrupts to a basic bank account
* a consultation on increasing the petition debt level for creditors. The level (currently £750) has not been increased since the Insolvency Act 1986 came into force and we believe that to be able to threaten someone with bankruptcy for such a small amount is disproportionate.

Business Minister Edward Davey said:

"While it is clear that stakeholders have strong concerns about some aspects of the personal insolvency framework, no strong case has been made for a radical shake-up. However, I am convinced that there is more that can be done to improve the delivery of debt advice to the most vulnerable and intend that Money Advice Service take up this work.

"I want to see creditors, debtors and particularly providers working together to improve standards in debt management, so that debtors are directed only to those operating the very best service, leaving no place for the rogue providers who are only in it to make money for themselves."



Notes to editors

1 BIS received 216 responses to the Call for Evidence, including from 42 private individuals, 35 from lenders and interest groups with the financial industry, 20 from the free-to-client debt advice providers (or interest groups), 15 from the commercial debt advice providers (or interest groups) and 6 from 'others'.

2 A copy of the Response to the Call for Evidence is available at: awaitingresponse

3 The call for evidence was conducted between 15 October 2010 and 10 December 2010.

4 The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of The Insolvency Service is available from

5 Media enquiries should be directed to:

David Ward - 020 7637 6373


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