Wednesday 10th of March 2010
The Insolvency Service’s announcement to increase the cost of going bankrupt by £90 could place even more financial pressure on those households with high unsecured debts.
When court fees and other charges are taken into account, using bankruptcy as a way out of debt could become increasingly unattractive for people.
While an individual voluntary arrangement (IVA) also comes with fees attached, these could be outweighed by the fact that getting IVA answers is a private matter and repaying debt this way does not automatically result in a home being repossessed.
Being declared bankrupt will not only cost more for Britons struggling with debt, but the potential fall-out - such as being barred from certain professions and having the bankruptcy published in local newspapers - could make this route even more unappealing.
Commenting on bankruptcy fees, Peter Sargent, president of R3, the insolvency trade body, says: "The higher charge has been introduced to ensure that bankruptcy costs don’t come out of the public purse and fund the Insolvency Service, which has never seen such a high demand for its ‘unwanted’ services."
By Chris King
- Alternatives to bankruptcy available, expert notes
- Bankruptcy 'should be a last resort' to tackle debt management issues
- Bankruptcy 'has improved attitude towards debt'
- Insolvency levels rising, figures show
- Negative equity leading to bankruptcy increase, says expert
- Bankruptcy alternatives 'should be sought'
