Bankruptcy process – the rules change again
On 6 April 2016, the application process to make yourself bankrupt changed.
The bankruptcy application procedure will now be online whereas previously, all applications had to be submitted to the Court, usually by first making an appointment to see the bankruptcy clerk and provided everything was in order, the papers would be rubber stamped by a judge.
As with most things these days, streamline and efficiency seem to be the keywords and by making the application online only, the Insolvency Service is hoping that the bankruptcy process will be easier and less stressful.
In other parts of the world, there has been an online bankruptcy process for many years and it has largely worked well.
The bankruptcy application forms are completed online and submitted electronically to an adjudicator who will make a decision about the application. The adjudicator is not a judge but a government official working in the Insolvency Service.
As a consequence, the fees for the bankruptcy application have reduced. Previously, the fee was £705. Now, the fee is £605 which is made up of £130 for the adjudicator who will consider the application and £525 for the Insolvency Service administering the bankruptcy. For the first time too, the fee can be paid online and in instalments. Finding such a large court fee to make yourself bankrupt was a major worry in itself. The instalment option should help considerably.
The benefit to the already overstretched court system is that it should free up more time and reduce administration. The difficulty however is that you must have access to a computer with an internet connection. The process could also be worrying and stressful if you are unfamiliar with using a computer or feel uncomfortable operating one. The Insolvency Service suggest you could get help from friends or family. This may help in some circumstances, but sometimes there is a desire to do something like this without your nearest and dearest knowing about it.
The online bankruptcy process only applies when you make yourself bankrupt. The procedure to make somebody else bankrupt remains unchanged and it is worth noting here in October 2015, the threshold to petition to make someone bankrupt increased from £750 to £5,000.
The online application process can be started by visiting the following link, https://apply-for-bankruptcy.service.gov.uk