Debtors unable to enter bankruptcy
Nearly three-quarters of personal insolvency practitioners have seen individuals unable to go bankrupt12 March 2014
70% of personal insolvency practitioners say they have seen debtors unable to enter bankruptcy in the last year because they could not afford the debtor’s petition, says R3, the insolvency trade body.
To enter bankruptcy, an individual must make an upfront payment of £175 in court fees and pay a £525 administration fee to the Insolvency Service (‘the debtor’s petition’).
59% of personal insolvency practitioners (IPs) that had seen people unable to afford the debtor’s petition said that the individuals in question had then not addressed their debts at all.
Stuart Frith, chair of R3’s personal insolvency committee, says: “The current rules severely limit the chances of financially struggling people resolving their situation. It is a matter of some concern that entering bankruptcy has become unaffordable for some.”