From 6th April 2016, bankruptcy applications are being taken out of the courts and moved online. The bankruptcy fee is also changing, so the process should become faster and cheaper.
If you’re currently in the process of declaring yourself bankrupt, your application will be submitted to a court and looked at by a judge, which means your case will be heard in court – as per the current rules.
If you submit your paper application after 6th April, you’ll need to start again using the new online system. Paperwork and fees submitted before 6th April will be dealt with by the court, regardless of the scheduled hearing date.
From Wednesday (6th April), you’ll be able to fill out an online bankruptcy application on gov.uk and avoid the need for a court hearing. The form will be submitted to an adjudicator at The Insolvency Service, rather than a judge, who will review your application and make a decision.
Creditor petitions from businesses and individuals who are owed money and seeking to have someone declared bankrupt will continue to apply to a Court Registrar.
Changes to the Bankruptcy Fee
From 6th April, the cost of applying for bankruptcy will drop from £705 (to be paid in cash at the court) to £655 – £130 for the adjudicator to consider your application (it was £180 for a debtor petition to the court) and £525 for managing your bankruptcy.
If you can’t afford to pay this in a lump sum, the good news is you’ll now be able to pay for your application in instalments – of as little as £5!
Payments can also be made online, but your application won’t be submitted until the total fee is paid.
The Impact of Bankruptcy Changes
The new system is being introduced as part of the government’s drive to transform public services, making them easier to use and saving the taxpayer money.
We believe these changes will help remove the stigma of going to court, which has been known to put people off applying for bankruptcy and get themselves into deeper debt.
The new online application process is designed to be simple and intuitive, but if you have any problems using it or would simply like advice and guidance from an experienced, independent debt adviser, please get in touch.