Ministry of Law data showed that 2,928 bankruptcy applications were filed by debtors in 2024. In response to growing concerns about unscrupulous debt consultancy practices, the Ministry of Law (MinLaw) has announced plans to propose legislation targeting firms that exploit the Debt Repayment Scheme (DRS).
What Is Driving the Regulatory Push
Over the past two years, authorities have observed a rise in debt consultants — some operating without proper credentials — advising debtors to take on additional borrowing to inflate their liabilities and artificially meet DRS eligibility thresholds. Others have been charging excessive upfront fees for services that are either ineffective or duplicative of what the Official Assignee provides for free.
These practices exploit vulnerable individuals at their most financially exposed, and in some cases leave them in a worse position than before they sought help.
What the Proposed Laws May Cover
- Mandatory licensing or registration for debt consultancy firms
- Fee caps or transparency requirements for services rendered
- Prohibition on advising clients to take on new debt to qualify for insolvency schemes
- Penalties for misleading or deceptive conduct in debt consultancy engagements
What This Means for You
If you are considering engaging a debt consultant, these developments reinforce the importance of choosing a reputable firm. Ask for a clear breakdown of fees, a written agreement of services, and references. Avoid any firm that encourages you to borrow more money as part of their recommended strategy.
WeCare's Commitment
WeCare Consultancy operates with full transparency. We explain every step, disclose all fees upfront, and never recommend actions that could put you at greater legal or financial risk. As regulations evolve, we remain committed to being a firm our clients can trust entirely.