Bankruptcy process to be sped up

99,000 people have been declared bankrupt in England and Wales in 2009

A plan to speed up the bankruptcy process in England and Wales has been published by the government.

It proposes letting people apply to become bankrupt by post or online, instead of going to court.

The Department for Business, Innovation and Skills (BIS) said this would help people in debt and cut court costs.

Government research has found that debtors sometimes have to wait three months for their applications to be heard in court.

"Many people delay making a petition for bankruptcy because they do not want to appear in court - meaning they can sink further into debt," said Business Minister Ian Lucas.

FORMS OF INSOLVENCY Bankruptcy: The traditional way of escaping overwhelming debt. Ends after one year, but you are likely to lose all your assets, including your house, to pay something to the creditors Individual voluntary arrangement (IVA): A deal between you and your creditors, overseen by an insolvency practitioner. Less stigma, less chance of losing your home, but involves paying some of your debts in one go or over a number of years Debt relief orders: Introduced in April 2009, these allow consumers with debts of less than £15,000 and minimal assets or surplus income to write off debts without a full-blown bankruptcy Coping with personal insolvency Dealing with company insolvency

"We want to reduce that delay, while also freeing up valuable court time and resources to deal with other aspects of insolvency."

"Decision makers" will be appointed who will be able to decide on each online or postal application, but who will also carry out "rigorous checks" to make sure potential bankrupts qualify properly.

"The proposals... will make it quicker and easier for people who are overwhelmed by debts, and have no means of ever fully repaying them, to seek relief through bankruptcy," said a BIS spokesman.

The government's consultation on its plans closes in February 2010.

Personal insolvencies have hit record levels this year because of the recession, with 99,000 people in England and Wales going bust in the first nine months of 2009.

Of these, nearly 58,000 were bankrupts, with the rest opting for individual voluntary arrangements (IVAs) or the new debt relief order.