Government proposals to reduce bankruptcy to an online
‘box ticking’ exercise have been roundly
criticised by the Institute of Credit Management (see
www.icm.org.uk
). Chief Executive for the ICM, Philip
King, was quoted as saying that whilst “applying
for insurance or booking a holiday online is one thing…
becoming bankrupt online leaving a trail of unpaid
creditors is not.”
The proposals appeared in a consultation document,
led by Ian Lucas, the Minister for Business and Regulatory
Reform, aimed at creating 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 the very least reduce, the delay many debtors experience
between presenting their bankruptcy petition and the
bankruptcy order being made. It would also free up
valuable court time and resources. Whilst Philip King
concedes the proposed changes would free up valuable
court time, he believes that allowing a person to
apply online to become bankrupt is “inappropriate,
unwelcome and likely to have seriously damaging consequences.”
Here at Shergroup we believe Philip King has hit
the nail on the head; the idea of DIY bankruptcy is
not one that we can support. We agree with the stance
taken by the ICM Chief that the government is going
too far and not placing enough thought into the chaos
it will create. We agree with the ICM that what is
really 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, with some form of objective
scorecard system based on the questions and answers
given.
There is no doubt in our mind, as providers of services
to the credit industry, that ‘fast-tracking’
bankruptcy may well be used as a loophole by the unscrupulous.
We see this so often in the world of enforcement,
where some members of the public are determined to
avoid their obligation to pay the court’s judgment.
Claire Sandbrook, as CEO of Shergroup and Treasurer
of the ICM, completely agrees with Philip King’s
concern that the Government is going to experience
difficulty in monitoring the quality of decisions
made in the proposed new system. Any proposal to make
bankruptcy a ‘tick box’ culture is going
down a very slippery slope and can only be attributed
to the need to save cost at the risk of people avoiding
what they can actually pay.
