New Bankruptcy Application Process

There has been a lot of talk over a number of years about removing the county court from the bankruptcy petition process in England and Wales. As bankruptcy petitions rose considerably in number around 2008/09, many thought that the court system was being unnecessarily overburdened by rising debtor petition numbers. It has long been argued in fact that it really is not necessary for a District Judge to hear bankruptcy petitions and grant bankruptcy orders. After all, the job of the Judge is merely to ascertain that the debtor is insolvent and that he or she has the right to file their petition in the particular court.

So from 6 April 2016, the court is at long last being removed from the bankruptcy process in the vast majority of cases. Debtors wanting to file for bankruptcy make a bankruptcy application online via the Insolvency Service website. Applications will be considered by the Office of the Adjudicator (someone in the Official Receiver’s office I believe) and all applications will be considered within 28 days.

The new system will lack the immediacy of the current system whereby bankruptcy petitions are heard and orders granted in just a couple of minutes but I suspect that most people will be relieved at not having to attend court and sit before a Judge.

As for costs- the current court fee of £180 is being replaced by a bankruptcy application fee of £130. The Official Receiver’s deposit of £525 remains the same. Hence there is an overall saving under the new system of £50 per applicant.

Further information on the new system is hard to come by and the new system remains unaccessible until it is rolled out formally on 6 April 2016.  It is assumed that the substance of the application will remain the same- in other words applicants will complete a statement of affairs detailing their assets and liabilities just as they do presently.

We do wish to emphasise that getting professional advice from an insolvency professional remains just as vital under the new system. Bankruptcy can have serious and often unexpected and unanticipated consequences for the unwary. Bankruptcy advice in Liverpool is available from experienced insolvency accountants and it is suggested that advice is sought BEFORE making your bankruptcy appplication so that you are fully aware and fully prepared for what lies ahead.