Consultation response to the regulations for a Low Income, Low Assets access route to bankruptcy.
CAS has long argued that the existing rules on debtor-led access to bankruptcy are inadequate in enabling poorer debtors to access debt relief. The requirement to prove apparent insolvency creates a significant barrier to debtor-led bankruptcy because it generally relies on formal recovery action by the creditor. We know from our On the cards research that formal debt recovery action is very rare unless there are significant assets (only just over a fifth of our debt clients' creditors had taken formal action) and debtors who are unable to constitute apparent insolvency are left in indefinite limbo. We know from the same research that debtors in this situation are subjected to contact and often harassment from their creditors, while being unable to remedy the situation.