New Government Debt Initiative welcome?

The Government plans to change the eligibility criteria for a Debt Relief Order to enable people with small pensions to be able to apply for this low cost debt solution.

Insolvency practitioners had complained the existing eligibility criteria excluded individuals who had built up a small pension. A recent survey showed over 95% of people were excluded because of their pension and of those around 75% had a pension pot of under £5000.

DRO’s were introduced as a low cost alternative to bankruptcy aimed at those with debts of less than £15,000 and with assets of less than £300 (up to £1k if they owned a car) and less than £50 surplus income a month.

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