Call for evidence outcome

Call for evidence: Review of the personal insolvency framework

From:: The Insolvency Service
Published: 5 July 2022
Last updated: 4 August 2023 — See all updates

Applies to England and Wales

Read the full outcome

Review of the personal insolvency framework: Summary of responses and next steps

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Detail of outcome

The Government is publishing a summary of responses to a call for evidence to inform its review of the personal insolvency framework in England and Wales which ran from 5 July 2022 to 24 October 2022. It sought views on three key areas:

The underlying purpose of the personal insolvency framework and where the balance should fall between providing debtors with a fresh start and providing returns to creditors
The funding of the framework, whether the burden of costs is apportioned fairly, and some of the wider consequential costs of bankruptcy
The current personal insolvency procedures and whether these are working effectively

The scope of the call for evidence covered the procedures within the personal insolvency legal framework, namely, bankruptcy, debt relief orders (DROs) and individual voluntary arrangements (IVAs).

The Government’s response summarises the views of the many stakeholders who replied to the Call for Evidence. The response also sets out the next steps that will now be taken to develop the review

Original call for evidence

Call for evidence description

The Government has issued a call for evidence on a review of the personal insolvency framework. The current framework is based on recommendations made over 40 years ago. While the framework has been added to on an ad hoc basis over the years, there has been no wider consideration of the regime. In response to a previous consultation on personal insolvency matters, stakeholders called for a full review of the insolvency framework, which Government agreed, starting with a call for evidence.

The call for evidence will cover England and Wales and will seek views on:

The purpose of the framework, what should be the objectives for a modern insolvency framework and where should the balance fall in providing debtors with a fresh start or ensuring returns to creditors.
Fees and funding. How should insolvency solutions be paid for, what are the wider consequential costs of insolvency. Is the current burden of costs apportioned fairly?
The current procedures within the personal insolvency framework (bankruptcy, Individual Voluntary Arrangements, Debt Relief Orders) and how they are working. It asks whether there are underlying areas of concern about the framework, what motivates debtors to seek one particular insolvency solution over another, are there barriers to entry to certain insolvency solutions? Is the framework sufficiently flexible and does it provide the right sort of insolvency solutions for the modern day.

The consultation is open until 24 October 2022. The Government is interested to hear views from individuals who have considered or been subject to a personal insolvency procedure, creditors and their representatives, debt advisers and charities, insolvency office holders, insolvency regulators, academics and any other interested parties.

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