Whilst bankruptcy might be the best way of dealing with your debts in certain circumstances, there’s no getting away from the fact that there are upfront costs involved. At the moment, the cost of declaring bankruptcy for an individual is £705, consisting of £180 in court fees and a £525 payment to the Official Receiver.
Crippled by debts and struggling to meet your essential living expenses, finding an extra £705 might seem an impossible task. However, help may be available to ease the burden of declaring bankruptcy. There may also be some steps you can take yourself to ease the financial strain enough to free up the required sum.
Assistance from third parties
- Help with court fees
People receiving certain means-tested benefits don’t have to pay the £180 court fee. These include Jobseekers’ Allowance, Employment and Support Allowance and Pension Credit. You’ll need to complete an application form from HM Courts & Tribunals Service and take it to the court on the day of your bankruptcy hearing, along with your latest letter from the benefits service.
Please note that you’ll still need to pay the £525 Official Receiver’s fee if you receive means-tested benefits.
- Help from charities and trusts
There are a number of charities and trusts that can help with the cost of going bankrupt. Some of these will only cover the £525 Official Receiver’s fee, but if you’re receiving benefits, you may find that you’re exempt from paying the court fee as noted above.
Utility companies are a good place to start. Companies including British Gas, EDF, Npower, Thames Water and United Utilities run trust funds to help their customers deal with electricity, gas and water arrears, as well as other debts. You’ll only be able to apply for help with bankruptcy costs from these funds if you’re a customer of one of the companies in question. There are other criteria as well, such as not being a homeowner and not having been made bankrupt before.
In most cases, they’ll also want to see proof that you’ve sought professional debt advice and that bankruptcy is considered to be your best debt management option. Bankruptcy Clinic can help with this.
Alternatively, you may be able to find a local or national charity that can help you with the cost of bankruptcy fees. For example, there are charities that help specific groups of people such as ex-servicemen and women, public sector workers and NHS staff. Again, Bankruptcy Clinic can provide details of suitable charities in your area.
- Sell your non-essentials
Take a good look at any non-essential assets you own and decide (a) if you can live without them and (b) if they’re worth selling to cover the cost of your bankruptcy fees. Likely items might include jewellery, unworn or lightly used designer clothes, and antiques.
However, if you decide to go ahead, proceed with caution. Get the items properly valued and keep a record of how much you sold them for. If you don’t do this and it later becomes evident that you’ve sold things for much less than they’re worth – especially to friends and relatives – this could land you in trouble with the Official Receiver once your Bankruptcy Order is in place.
- Save up for the fees
Yes, this might well be impossible if you have literally no pennies to rub together at the end of each and every month. But you may be able to identify a few areas where you can save – perhaps by cutting down a bit if you drink or smoke, or cancelling unnecessary subscriptions or memberships?
By making a few lifestyle changes, you may find that you can save up for the cost of your bankruptcy fees sooner than you think.
Get expert bankruptcy help today
If you’re considering declaring yourself bankrupt, talk to Bankruptcy Clinic today. As our name suggests, we specialise in providing all the information and advice on bankruptcy that you need. We also offer access to other debt solutions, including Debt Relief Orders, Individual Voluntary Arrangements and Debt Management Plans.
We’ll take the time to listen to your story before discussing which types of debt management might suit your needs and circumstances. Then, we’ll refer you to our partner firm, MoneySolve Ltd, one of the UK’s leading debt management firms. Their fully-qualified advisers will help you find the right solution and guide you through each step of your chosen process, providing all the support you need along the way.
Our friendly team are waiting to hear from you. Call us free from a landline on 0808 168 7389 or 01625 462 770 from a mobile and start your journey to getting debt-free.