Government proposals to reduce bankruptcy to an online ‘box ticking’ exercise have been roundly criticised by the Institute of Credit Management (see www.icm.org.uk ). Chief Executive for the ICM, Philip King, was quoted as saying that whilst “applying for insurance or booking a holiday online is one thing… becoming bankrupt online leaving a trail of unpaid creditors is not.”

The proposals appeared in a consultation document, led by Ian Lucas, the Minister for Business and Regulatory Reform, aimed at creating a new administrative entry process, where an individual can apply for their own bankruptcy without going through the courts.

The government believes that this will remove, or at the very least reduce, the delay many debtors experience between presenting their bankruptcy petition and the bankruptcy order being made. It would also free up valuable court time and resources. Whilst Philip King concedes the proposed changes would free up valuable court time, he believes that allowing a person to apply online to become bankrupt is “inappropriate, unwelcome and likely to have seriously damaging consequences.”

Here at Shergroup we believe Philip King has hit the nail on the head; the idea of DIY bankruptcy is not one that we can support. We agree with the stance taken by the ICM Chief that the government is going too far and not placing enough thought into the chaos it will create. We agree with the ICM that what is really needed is a system whereby any debtor seeking insolvency is required to have a face-to-face meeting with someone who can properly explain the options and their consequences, with some form of objective scorecard system based on the questions and answers given.

There is no doubt in our mind, as providers of services to the credit industry, that ‘fast-tracking’ bankruptcy may well be used as a loophole by the unscrupulous. We see this so often in the world of enforcement, where some members of the public are determined to avoid their obligation to pay the court’s judgment. Claire Sandbrook, as CEO of Shergroup and Treasurer of the ICM, completely agrees with Philip King’s concern that the Government is going to experience difficulty in monitoring the quality of decisions made in the proposed new system. Any proposal to make bankruptcy a ‘tick box’ culture is going down a very slippery slope and can only be attributed to the need to save cost at the risk of people avoiding what they can actually pay.