What do the bankruptcy changes mean for you?
Written by Chelsea Potter on 24 July 2016
The application process for bankruptcy has changed. With applications moving electronically and charges increasing and decreasing in the last few months, we thought it would be a good idea to put together a blog post to explain what the new bankruptcy changes mean for you.
The bankruptcy process has changed and it has now become a lot easier to complete. Whereas before you had to apply through the courts, residents in England and Wales can now apply online. You will still need to pay a fee upfront in order to go bankrupt but rather than fill out forms and have to visit the court, you can now sort everything electronically. This change happened earlier this year in April but the most recent cost changes occurred with effect from the 21st July – you can read more about the fees below. Please be aware that the changes to the application process only affect people in England and Wales. The process for Northern Ireland remains the same and residents in NI will have to apply via the court.
Charges regarding bankruptcy came into force on the 6th April. Before then the fee for bankruptcy was £705. After 6th April costs decreased to £655 – of which this was broken down into a £130 application fee and a £525 fee for the management of your bankruptcy. This cost has changed again and as of the 21st July the bankruptcy charge has risen slightly to £680.
Applications before the changes
From the 6th April all bankruptcy applications will have to be completed online. Paper applications started before then but not completed will have to be restarted online. If you submitted a paper application before the 6th April your process will be unaffected. The fee for your application will depend on your submission date. Applications from 21st July however will cost you £680.
You can’t complete an application for bankruptcy until the full fee of £680 has been paid. However you can create an online account and keep making installments towards your cost for a period of time – you can log in and out of your account and deposit as much as you can afford as and when (payments do need to be at least £5 however). This online system allows you to save up for bankruptcy if you can’t afford to pay the full amount upfront.
Other methods for funding your bankruptcy might include help from charities. Some charities will be able to cover the costs of your bankruptcy – if you are struggling with the costs Citizen’s Advice are able to help you find a suitable charity and they can also help you with your application. Some utility companies also have trust funds to help customers who are struggling with their utility debts – they might be able to help you pay your application fees. There is no longer a fee remission for benefit claimants so if you think bankruptcy is the right debt solution for you, we recommend you seek help from charities or trusts in order to fund your application.
If you want more information regarding the bankruptcy process, visit our bankruptcy page. If you are struggling with debts and would like to talk about the options available, call us on 0800 280 2816.
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