Apply for Bankruptcy From Your Mobile
On the 6th April 2016 The Insolvency service launched a new system to help people needing to apply for Bankruptcy. The old system involved a long winded process of completing a statement of affairs and then filing a court petition, whereas the new streamlined version features an online application to an adjudicator who will decide if you should be made Bankrupt. As the somewhat tongue in cheek title of this blog suggests, this can even be done by mobile phone.
Will the ease of application result in a mass influx of people going bankrupt?’
This is the obvious question that springs to mind and no doubt The Insolvency Service have agonised long and hard within their ranks. According to their website, they first started consulting on this new process back in 2007 and “views have been invited… from a range of interested parties, from the debt advisory sector to the private sector”. So it’s not as if they’ve rushed into it. Ultimately, whilst the new online application should make it easier and less daunting for some, overall the adjudication process will make sure that any applications are reviewed to make sure that this is the correct decision for the individual involved.
How easy is the new online bankruptcy application?
We don’t intend to go into huge detail here but overall the process is much, much more simple. You start by creating an account on gov.uk, once completed you will be emailed a reference number that will enable you to sign into your application. You can then complete the form at your leisure, leaving the application and returning to it whenever you wish. You then pay the fee online or in cash and submit your completed application. Once reviewed you will receive an email with the decision. It doesn’t get much more straightforward than that!
What are the new bankruptcy fees?
As of April 6th the cost of going bankrupt will actually drop! Did I hear that right, the Government are actually reducing a fee? Well, yes it is because under the new system you’ll pay a £130 adjudicator fee instead of the old £180 court fee. The £525 Official Receiver’s fee actually stays the same but overall this is a positive change, albeit a relatively small one. Another, more significant change in our opinion, is that you’ll now be able to pay these fees in instalments, which addresses the age old paradox of, ‘If I’m bankrupt how can I afford to pay the bankruptcy fees?’ However, please be aware that you can only do this online but payments can start at just £5 and can be paid in as many instalments as needed.
One potentially contentious issue for some is that under the new process individuals are allowed to pay their bankruptcy fee using a credit card. The Insolvency Service’s response to this in the main is, “card payments would better facilitate third party payments from friends and families and from charities”. We are not sure that this really addresses the issue but this response is in line with the Governments new ‘digital by default’ strategy.
The income and expenditure part of the new application will now be based on the Standard Financial Statement (SFS). This is another positive change as it will force debt advisors and government resources to use a uniformed approach when determining an individual’s surplus/deficit figure.
Where can I get more information?
Before ploughing in and submitting the form, we strongly recommend that you seek independent financial advice, either from us or from a debt charity like stepchange.org. The reason being is that there may still be alternatives to Bankruptcy that are more suitable for your circumstances. For example, an IVA is one alternative that allows you to settle your unsecured debts, by entering into a legally binding agreement with your creditors.
If you are considering bankruptcy then Kingsland Business Recovery can help you weigh up the options that are available. To discuss further please feel free to contact one of our directors on 0800 955 3595 for a no obligation, confidential chat. Or alternatively, drop us an email at email@example.com.