Key date: 1 October 2015, the threshold debt needed for creditors’ bankruptcy petitions has been increased

On 1 October 2015, the Insolvency Act 1986 (Amendment) Order 2015 (SI 2015/922) amended section 267(4) of the Insolvency Act 1986. The effect of this is that the threshold debt needed for creditors’ bankruptcy petitions (known as the bankruptcy level) increases significantly from £750 to £5,000.The service of a Statutory Demand and issue of a Bankruptcy Petition is an effective method of recovering rent arrears and other undisputed debts. However, a landlord will now have to wait until the arrears have reached a much higher level before it can pursue a tenant who is an individual in this manner, or use another method to recover rent.

Source: Insolvency Act 1986 (Amendment) Order 2015 (SI 2015/922) and Practical Law