From today’s date (6 April 2016), there will be vast changes in the way that individuals can apply for bankruptcy by moving the application process to online-only.

The old process usually involved applicants completing two forms, one of which was 29 pages long, and submitting these in triplicate to their local County Court. From today, applicants will need to create an online account, allowing them to login and amend their application as many times as they wish before submitting it online. Once the application has been received, the application will be assessed by an adjudicator. The main obvious advantage of the new system is that individuals no longer have to attend court in order to be declared bankrupt.

The second advantage of the changes is the decrease in fee, from £705 to £655. The old fee consisted of a £525 Official Receiver’s fee and an £180 court fee, whereas the new fee is made up of an £130 Adjudicator’s fee and a £525 Official Receiver’s fee.

However, a third less publicised advantage to the bankruptcy changes is the way in which applicants can make payments. Previously, the £705 was required to be paid upfront at their local court before their application for bankruptcy could be process. Whilst those receiving JSA, ESA or other financial assistance may have been able to have the £180 court fee waivered, the £525 Official Receiver’s fee was still required to be paid upfront and in full. There was therefore a paradox for applicants in that in order for them to be declared bankrupt, they were required to pay a large sum of money.

The good news for applicants is that as of 6 April, applicants who can’t afford the £655 in one lump sum can pay online in instalments. Whilst individuals are still unable to submit their bankruptcy application until the amount has been paid in full, they are now able to pay in increments which can be as little as £5.

“Whilst £655 is obviously still a great deal of money to a person considering going bankrupt, the ability to make payments as-and-when the applicant can afford to will be a vast improvement on the old system. It is a sad reality that previously some individuals had to ask charities for assistance in paying their Court fees. The new system will provide individuals with a much more manageable payment solution to slowly chip away at the required fees.”
Andy Platt, Group Development Manager of Focus Insolvency Group

If you have a contact or client who is experiencing financial difficulties, or if you would like to discuss anything that has caught your eye in this blog post, please get in touch! Focus Insolvency Group specialise in recovery solutions and are keen to help individuals and businesses get back on their feet. We can help with debt consolidation, preventing bailiff and debt collection agent action, allowing individuals to make a fresh start and companies to continue to trade.