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No Bankruptcy If You Have a Pension

Posted on 7 April 2015

Individuals are to be prevented from applying for a Bankruptcy or Debt Relief Order if they have a pension that could clear their debts according to new guidance from the Insolvency Service.

The guidance come in light of the decision in the matter of Horton V Henry at the end of 2014 and is currently pending a decision by the Court of Appeal.  

Under the new guidelines a person will be considered ineligible to apply for a bankruptcy where they are over 55 and have access to their pension*, even where this is not drawn. 

This applies to individuals unable to pay their debts and are eligible to apply for their own bankruptcy or debt relief order where after taxes and charges the pension fund could clear the debts.

A spokesman for the Insolvency Service added, "where a bankruptcy order has already been made the Official Receiver should consider whether it is appropriate to seek an annulment as the debtor was not insolvent".

*From April 2015 a change in the law means that individuals with a pension and over the age of 55 will no longer need to purchase an annuity but can instead draw down the entire pension. 

If you have any questions relating to bankruptcy or how your pension might be affected by these changes then speak to one of our Insolvency Practitioners, Alison Byrne or Ruth Gilbert.  

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