Bankruptcy fee set to rise

The fee for a bankruptcy petition will increase from 1st June, The Insolvency Service has announced.

An individual filing for their own bankruptcy will pay £525 - up from £450 - while a creditor attempting to make a borrower bankrupt will pay £700, up from £600.

It was only last April when bankruptcy fees last increased, with the fee for an individual`s petition (a `debtor`s petition`) increasing by £90 at that time.

An expert at debt management company Gregory Pennington said: "For some, bankruptcy is the only realistic way to tackle their debts, but the fee can be a barrier to getting the help they need. They might be left waiting for their lenders to take action, by which time the debt may have grown.

"That`s one reason why Debt Relief Orders [DROs] were introduced - to help people who couldn`t afford to enter bankruptcy. However, DROs are only available to people with very low disposable incomes and few assets.

"There are other options too, such as an IVA [Individual Voluntary Arrangement], that might be appropriate. Struggling borrowers should discuss their options in depth before they commit themselves to a particular approach."