The way in which you declare yourself bankrupt has changed. Fiona Gaskell, partner, explains.
From 6 April 2016, anyone who wants to present their own bankruptcy petition will no longer have to apply to the court.
Instead, a new procedure has been introduced by which applications for bankruptcy are made to an adjudicator within the Insolvency Service, with the application completed online via the UK government website gov.uk.
It is now not be possible for anyone to declare themselves bankrupt without using this new scheme. All applications will have to be made online, and there is no paper application procedure available.
What will it cost?
The fee for the new online procedure is on the face of it less than the previous court procedure, and it will be possible for debtors to pay the adjudicator’s fee by instalments, with minimum payments of £5.
Debtors should also be aware that it is still necessary to pay an official receiver’s deposit.
Why the change?
The online application has been designed to be simpler and less legalistic than the current form, and has the ability to bypass questions that are clearly not applicable, based on information that the debtor has already completed.
The changes have been made because it is believed that people are intimidated by the idea of going to court and appearing in person before a judge. By applications being online, there will be no hearing, and no need for a debtor to appear personally.
There are various prompts on the gov.uk website encouraging debtors to seek advice from the many debt advice agencies available to them. Of course, no one should ever make themselves bankrupt without seeking advice specific to their personal circumstances, and without understanding all of the other options available to them.
What will happen next?
Once the order has been made, the matter will be passed to the official receiver’s office, to be dealt with in the same way as debtor bankruptcy petitions are currently dealt with following an order by the court. All of the obligations to cooperate with the official receiver, and the restrictions that currently apply will continue to apply to the bankrupt, irrespective of how the order for bankruptcy was originally made.
See also: Applying to make yourself bankrupt