The Insolvency Service has today (13 March) announced increases to the fees paid during insolvency processes, “in line with inflation”.
From 6 April 2014, fees and deposits paid in creditor and company winding up petitions in England and Wales will increase, however deposits for people petitioning for their own bankruptcy will stay fixed.
A statement from the Insolvency Service said the fee increase takes into account “inflation since the last time fees and deposits were put up in 2010 and 2011 respectively.”
Business Minister Jenny Willott said: “No one wants to increase fees but today’s increases will make sure the Insolvency Service continues to provide a high quality service to those in debt whilst still representing good value for money.
“People petitioning for insolvency are expected to pay their fair share of the cost and the taxpayer should not be responsible for the fee. Only the deposit is paid upfront and the remainder of the fees are collected once assets are realised.”
Under the new fee structure, bankruptcy debtor petitions and creditor petitions fees will rise 7.9% to £1,850, while company compulsory winding-up fees will increase 7.4% to £2,400.
Deposits for bankruptcy creditor petitions and company compulsory winding-up will increase 7.1% and 7.3% respectively (£750 and £1,250). The deposit for a bankruptcy debtor petition will remain £525.
Willott said: “To make sure the process is accessible to those people who need it, we have not changed the deposits paid by people petitioning for their own bankruptcy.
“Bankruptcy gives people a fresh start and keeping the deposits at the current level will make sure that people who find themselves with debts they can’t pay are able to make a clean break and get on with their lives.”
Giles Frampton, vice-president of insolvency trade body R3, said: “We can’t help but notice a certain irony in the Insolvency Service putting up its own fees for insolvencies while at the same time proposing a series of potentially harmful changes to the way insolvency practitioners are allowed to set their own fees in certain cases.
“The increase in the Insolvency Service’s fees means that returns from estates will diminish. That is regrettable, but it is important that a proper service is provided to debtors and creditors alike. It is to be hoped that the benefits of a strong and effective insolvency profession are equally understood.”
On 3rd April, Insolvency Today will host its Insolvency & Restructuring conference at London’s QE2 conference centre, where Jenny Willott will address delegates on fee reform.