The government has proposed raising the threshold at which a creditor can petition for bankruptcy after dubbing the current level "disproportionate", as part of its response to a call for evidence on its personal insolvency review. Creditors can currently petition to make someone bankrupt for a debt valued at £750, a figure which has not changed since the Insolvency Act 1986.

But the government has now said being able to threaten bankruptcy for such a small amount is disproportionate and has proposed a consultation on increasing the petition debt level. Lee Manning, vice-president of insolvency trade body R3, welcomed the proposals.

He said: "R3 welcomes the government's announcement today to consult on increasing the petition debt levels for creditors. R3 believes that a rise from the current level of £750 to £3000 would be a more appropriate sum for a creditor to petition for bankruptcy."

In other proposals a separate consultation has been suggested on how to facilitate access for bankrupts to a