DETI Press Release "Enterprise Minister introduces Debt Relief Bill"
The scheme will help people burdened by debt which they have no realistic prospect of being able to repay. Providing they meet certain eligibility criteria, individuals will be able to apply to the Official Receiver for a Debt Relief Order. This will protect them against action by their creditors for a one-year period, at the end of which their liability to pay debts covered by the Order will be cancelled.
"The proposed scheme will offer the least well off in our society an affordable way of freeing themselves from burdensome debts which they have no prospect of being able to repay."
"The administration of the scheme will be relatively straightforward and cost-effective because there will be no need for a court hearing. It is estimated that up to 1,000 people could make use of the scheme each year."
Application to the scheme will be through debt advisors, appointed to act as intermediaries. These intermediaries will assess debtors' eligibility and verify financial circumstances. Eligibility conditions will include a ceiling on total debt.
It is intended that the application fee will be set at a level considerably lower than the £345 deposit currently payable to petition the court for bankruptcy.
The Debt Relief Scheme is expected to become operational in early 2011 at the latest, following the making of primary and secondary legislation, and commissioning of the service.
The Minister reinforced her support to those in debt. She said: "I have the greatest sympathy for those affected by the recession who are struggling to meet household bills and pay off past debts. The provision of debt relief continues to be a key commitment for my Department and I will continue to give this issue a high priority now and in the future."