Bankruptcy To Be Made More Expensive

With more people than ever before in the UK going Bankrupt (the Insolvency Service has provisionally estimated that 2009 will see an 11% increase on 2008, previously the highest on record), it has just been announced that the debtor’s Bankruptcy deposit is to increase from 6th April 2010 by 25%, from £360 to £450.

Whilst those on benefits will still be entitled to help with the court cost under the new pricing structure, the imposition of such a large increase in the fixed fee deposit, will undoubtedly make accessing Bankruptcy much more difficult, particularly for those that do not meet the criteria for a Debt Relief Order and are unable even to meet their essential monthly outgoings.

Whilst further work is needed to understand the reasons why some people in the UK continue to have insufficient income even to cover essential expenditure, the reality is that this does still happen and we can’t continue to ignore the fact that these people will either have to turn to unregulated sources of borrowing to find the money or continue to bury their heads in the sand.

The charity understands the need to levy fees given the significant cost of administering Bankruptcies. However, there clearly needs to be some distinction drawn between those that can afford to petition for their own Bankruptcy and those that have fallen below the poverty line and are unable to do so.