Bankruptcy becomes more expensive

Bankruptcy is to become more expensive from April this year – to the tune of £90.

For bankruptcy petitions lodged after April the 6th, the debtor will be charged £450 instead of the current charge of £360.

Even though the cost of administering bankruptcy cases have not risen, the Insolvency Service is presenting the change as aiming to make bankruptcy proceedings fairer by getting debtors to bear more of the costs of writing off their liabilities themselves.

But that is likely to lead to more people falling between the cracks – where they cannot pay their debts off, but also cannot afford to declare bankruptcy.

People getting into financial difficulties of this sort usually fall back on informal Debt Management Plans, which can take years to complete clearing their debts.

But the government is trying to provide more bankruptcy assistance, launching a new kind of "quickie bankruptcy" called a Debt Relief Order.

Atlantic director Vance Parsons commented: "We are seeing a marked rise in the number of people requiring bankruptcy assistance as levels of disposable income continue to fall. Consumer attitudes to bankruptcy are changing."

Debt problems – payday loans

15/03/2011

Once again British consumers struggling against debt problems have been told to avoid resorting to t ...

Debt problems: Interest rate threat

14/03/2011

An increase in interest rates could plunge hundreds of thousands of households into debt problems. < ...

Debt problems: borrow to pay debts?

08/03/2011

People thinking about borrowing money in a bid to alleviate their debt problems have been told only ...

Debt problems – pay off debt

07/03/2011

People with debt problems currently considering the best ways to deal with them, might be interested ...