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Tuesday
Mar092010

Government increases bankruptcy petition fee to £450

Over lunch a couple of colleagues and I were chatting about the new costs for declaring yourself bankrupt. If you thought that bankruptcy was a simple way out of a debt problem - think again. The cost of petitioning fees for bankruptcy are set to rise significantly. So much so that the average person considering bankruptcy for legitimate reasons may now find themselves in the uncomfortable position of not being able to afford to “go bankrupt”.

At the moment, the cost of petitioning the Government Insolvency Service stands at £360. When you consider the reason for petitioning them is because you can’t afford to pay your creditors, this is quite a stinging cost. To make matters worse, this fee is set to rise from April 6th of this year to £450. When you take into account court fees and other associated costs, you would be looking at a minimum £600 out of pocket expense simply to petition for bankruptcy. Bear in mind that petitioning does not guarantee acceptance of your bankruptcy proposal and you can see just how much of a barb these fees really are.

On a mini plus note, if you’re a recipient of benefits, you may be able to have the £150 court fees cost waived. However, even with the court fees waived, anyone considering bankruptcy is unlikely to have a spare £450 sitting around doing nothing.

There are alternatives to bankruptcy including IVAs (Individual Voluntary Arrangements) and DROs (Debt Relief Orders). The drawback is that both have hefty restrictions on who can apply and DROs are means tested and simply not available to most people.

If you’re in the unfortunate position of having to consider bankruptcy, IVAs or DROs you should seek professional advice. Here at St Matthew Business Services we can assist you in the process. None of these options should be taken lightly and we are well aware of the stigmatism associated with them. Rest assured that we treat everyone as an individual and won’t treat you as just another number. To take the first step, click on the Contact button at the top of this page and let one of our advisors assist you.

 



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    Government increases bankruptcy petition fee to £450 - Tax, Legal & Business News from London - St Matthew Accountants London

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