Dismay over law changes
Midland creditors chasing cash from debtors have been warned they will find their money due to new laws relating to personal insolvency.Commercial lawyers and other professionals in the credit industry today reacted with dismay to a series of briefings revealing how new legislation would hit creditors further.
The warning was issued by Neil Jinks, client services manager for the Debt Recovery Division of Burton and Birmingham-based Else Commercial Solicitors, after he attended the annual conference of the Civil Court Users Association. Mr Jinks said: "We were addressed by a number of senior figures including Chris Mayor, chief executive of HM Courts Services, David Foley, director of Enforcement for HM Court Services, and Kevin Westall, Head of Debt and Housing at the Ministry of Justice.
"Many of those present felt that, as a result of the Tribunals Courts and Enforcement Act of 2007, debt recovery from personal individuals will be more difficult as a time when the credit crunch and banking crisis is likely to cause an explosion in levels of debt.
"Lawyers representing clients - who as creditors are at risk from bad debt - believe this is not good news." Mr Jinks said the changes were in line with the Government’s policy to lift the stigma surrounding personal insolvency and bankruptcy and follow on from the Enterprise Act of 2002 that dealt with changes in the corporate insolvency process.
"The new act will introduce what is known as the administration Order, the Enforcement Restriction Order, the Enforcement Restriction Order and Debt Relief Order," said Mr Jinks.
"These orders aim to help debtors who have relatively little money avoid having ti be declared bankrupt."
The orders can fix payments, protect the debtor against further action and even cancel a debt after a qualifying period.
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