UK Government seeks views on personal insolvency framework

The government has today launched a call for evidence seeking stakeholders’ views and evidence on the personal insolvency framework and whether it serves the needs of debtors and creditors in the 21st century.

The last fundamental review of personal insolvency was carried out 40 years ago. The government is seeking views and evidence on the overall purpose of the framework, how it currently supports those in financial difficulty and how it is funded.

Business Minister Lord Callanan said:

Any vibrant economy relies on people spending money, and for many, using credit is an important part of that. However, in situations where people are unable to repay borrowed money, it’s vital that we have a system that is fair to both them and their creditors.

Our current personal insolvency framework has been in place for many years and so it is only right that we examine whether it works as effectively as it should in today’s world.

The government would welcome responses from people who have experienced debt, creditors and their representatives, trade bodies, debt advisers and charities, insolvency practitioners, recognised professional bodies, academics, and any other interested parties. Responses will help to inform our understanding and identify whether reforms are needed.

Peter Tutton, Head of Policy, Research and Public Affairs at StepChange Debt Charity, said:

We know from our clients that personal insolvency remains poorly understood, a source of potential fear and perceived stigma, and in many cases expensive to access at the outset and risky if circumstances change. We look forward to using the evidence from our client experience to help inform the review. We would see success as delivering an agreed pathway, supported by Government, towards a personal insolvency framework that works with debt advice to deliver sustainable, affordable and fair debt relief for those who need it, under a well-regulated and effective supervisory regime.

Eric Leenders, UK Finance Managing Director, Personal Finance, said:

As part of a highly-regulated sector our members work closely with their customers, and with debt charities, to provide tailored support to those facing into financial difficulty. This support always aims to help customers without the need for insolvency solutions. However, where such solutions are used, they should be accessible, understandable and fair for both borrowers and lenders. As such we welcome this review and will be happy to contribute to the call for evidence.


The personal insolvency review will cover the framework within England and Wales only. Personal insolvency is an entirely devolved function within Scotland and Northern Ireland. Responses for the call for evidence must be received by 24 October 2022.

The call for evidence has been drawn up with the assistance of four academics known for their expertise in the area of personal insolvency:

  • Professor David Milman (Lancaster University)
  • Dr Joseph Spooner (London School of Economics)
  • Dr John Tribe (University of Liverpool)
  • Dr Katharina Möser (University of Birmingham).

Statutory Debt Repayment Plans (SDRPs) are currently in development by HM Treasury and are not in scope for this personal insolvency review. Neither is the Breathing Space scheme as it is not an insolvency procedure. In addition, County Court Administration Orders and Debt Management Plans (DMPs) are not within the personal insolvency legislative framework and are not considered as part of this review.

Policy on insolvency law is partly devolved to Scotland and fully devolved to Northern Ireland.

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