Help With Bankruptcy Fees
If you’re considering declaring bankruptcy, then keep reading, as we explain who pays for bankruptcy fees and how you can get help with bankruptcy fees.
If you’re struggling to pay your debts, – declaring bankruptcy could be the best opportunity you have for a fresh financial future.
But declaring bankruptcy isn’t free, and if you’re already in financial trouble you may find it difficult to raise the money needed for a bankruptcy application.
How Much Does Bankruptcy Cost?
Bankruptcy is an insolvency tool that can be used by individuals in financial distress to escape debts and secure an opportunity for a financial reset. It’s a tool that’s best used by individuals who owe large sums of money or who have few assets, so it might surprise you to learn that declaring bankruptcy costs money.
The United Kingdom’s Insolvency Service oversees bankruptcies. In order to lodge an application for bankruptcy, it’s necessary to pay the correct fee. Currently the application fee for bankruptcy is £680. This amount must be paid in full before your application for bankruptcy can be submitted.
Who Pays for Bankruptcy?
So who pays for bankruptcy fees? If you are lodging an application for bankruptcy with the Insolvency Service, then you are responsible for ensuring the £680 fee is paid.
If you are unable to pay this amount up front, then the Insolvency Service offers a simple scheme where you can pay the fee in instalments over several months. However, it’s important to note that the amount must still be paid in full before your application can be submitted for processing.
If you owe more than £5,000 to one or more creditors, then your creditors are legally permitted to lodge an application for bankruptcy on your behalf. In this case, your creditor will be the one who pays for bankruptcy fees. They are only likely to do this however, if they stand to recuperate the money they are owed through the bankruptcy process.
What Should I Do If I Can’t Afford the Bankruptcy Fees?
Bankruptcy can be an effective insolvency tool, but it’s one that comes with serious, long-lasting financial consequences for the individual. With that in mind, declaring bankruptcy is often only done as a last resort, when an individual has large debts that can be wiped out, or if they have very few assets that can be lost.
If you’re in this position and are already struggling to pay your debts, then it’s highly likely that you’ll have difficulty paying the bankruptcy fees yourself. If this is the case, the first thing you should do is approach a licensed insolvency practitioner for expert advice. If you need help with bankruptcy fees, there will be several options available to you.
Can I Get Help With Paying Bankruptcy Fees?
You can get help with bankruptcy fees, ensuring that even if you’re struggling financially, there will be a way to fund the bankruptcy application. This means that even those individuals in serious financial distress will ultimately have the opportunity for a fresh financial start once the bankruptcy period is over.
The first option available is to pay the Insolvency Service in instalments. This is the simplest option, however it requires you to have some form of income each month in order to pay. If you can’t keep up with other bills, you may find this difficult to achieve. You may also not have the time available to do this if you are losing money each month.
If you owe £5,000 or more to creditors, the next option is to have your creditors pay for the bankruptcy application. They can file on your behalf and will do so if it’s in their interest financially. If you owe £5,000 or more, then a creditor can also force you into bankruptcy if they believe you have assets that can be sold to pay the money owed to them.
Many companies will often be willing to cover the cost of the bankruptcy application or help with some part of the fees, even if you do not owe more than £5,000. This is the case with utility companies and money lenders, for example, who see many of their customers struggling to pay bills or repay loans.
Finally, if you are unable to source the funds elsewhere, you can apply for assistance from a financial charity. These are often available if you have no other means of declaring bankruptcy, and the money will be issued as a grant, meaning you do not need to pay it back.
To summarise, the primary options available that can help with bankruptcy fees are:
- Paying the bankruptcy application fee in instalments
- Creditors paying for or forcing you into bankruptcy
- Securing a grant from a financial charity
How to Get Help with Bankruptcy Fees?
An insolvency practitioner can advise on the best way for you to get help with bankruptcy fees. Every individual has a unique financial situation, and the best option will depend on how much money you owe, who you owe that money to, and whether you have disposable income or not.
If you cannot pay the fees yourself, either in one go or as instalments, then you need to approach your creditors for assistance. Many companies (particularly utility companies, for example) will have a dedicated application process for this, and they may be willing to fund the bankruptcy application.
If you owe larger sums of money, then creditors may also be willing to assist and pay the fee if they believe they will see a larger return from this. An insolvency practitioner can carry out these negotiations on your behalf.
Contact Irwin Insolvency Today for More Information on Help With Bankruptcy Fees
If you need help with bankruptcy fees, the experienced team at Irwin Insolvency is here to assist.
Our expert insolvency practitioners have the skills and knowledge to ensure that you understand the bankruptcy process. They can explain in more detail how to get help with bankruptcy fees, and help you to decide if bankruptcy really is the best option.
Contact Irwin Insolvency today for your free consultation.