An interesting new development in the UK is the formalization of a new tool, the Debt Relief Order, to let consumers eliminate their debts under the power of bankruptcy but without all the hassle or cost.
For debtors that have less than £15,000 of unsecured debt and no assets, they can go to a credit counselor, who can file an online form on behalf of the debtor, and basically, Poof!, the debts are no longer collectible and after one year the final discharge is granted.
The bankruptcy courts in the UK recognized that about 11% of filers fell into the debt relief order category and that those cases were fairly straightforward and only added to the workload of the bankruptcy court. There was no need for that.
One interesting development is that CCCS, Consumer Credit Counselling Service in the UK is one of the few groups in the UK that is paid for collecting funds from consumers and returning them to creditors, using the American credit counseling model. Time will tell but I wonder how many debt relief orders they will put forward before it puts them in a bad light with creditors as they assist consumers to cancel the debts instead.
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