The Government has opened a public consultation into how to reform the personal insolvency framework and align it "with the needs of 21st century stakeholders".

It will work with stakeholders and other interested parties to develop proposals for reform, which will be taken into further public consultation.

According to the Government, the work will likely be "wide-ranging" and will cover routes into insolvency, how to tackle reckless behaviour and options for structural reform of the framework.

The UK's personal insolvency framework is designed to help people repay their creditors using a procedure appropriate to their situation.

The publication follows the Government's call for evidence into the personal insolvency framework in England and Wales, which ran from 5 July 2022 to 24 October 2022.

Nicky Fisher, President of R3, the UK's insolvency and restructuring trade body, said:

"We welcome the Government's decision to launch a consultation into the personal insolvency framework, and their recognition that there are shortcomings in the current regime and areas where it could evolve in order to better meet the needs of those who use and work with it.

"The framework needs to be reformed so that it and its offering reflect the way society operates today and the changes in attitude and approach to personal insolvency."

The Government aims to publish proposals for reform of the personal insolvency framework early in 2024.

Talk to us about your business finances.