Cannot afford Bankruptcy fee – What can I do
In England and Wales the Bankruptcy fee is £680 per person. But what if you are too broke to afford it?
Jump to article contents:
- Pay the Bankruptcy fee in installments
- Apply for a grant to pay your Bankruptcy fee
- Consider a Debt Relief Order
Need advice on your options? Give us a call (0800 044 3194) or complete the form below to speak to one of our experts.
Pay the Bankruptcy fee in installments
You may think that the bankruptcy fee (currently £680) is just not affordable. But before you discount this solution why not consider the various ways you could raise the funds. Firstly you are allowed to borrow the money. Perhaps you know a friend or family member who could help you out.
If borrowing is not possible you could sell something you own. One of the things you could consider is your car. If it is worth more than £1000 you may not be able to keep it anyway. So you could sell it before hand, buy a run around for £1000 or less and pay for your bankruptcy with the excess.
The other option is simply saving the money you need. Of course this is never easy. But one way of doing so is to stop making any more payments to your unsecured creditors. They may contact you to find out what is going on but most will put your account on hold once they learn you are going bankrupt.
Your creditors will normally give you time to save for your bankruptcy fee. If they contact you demanding payment be honest with them. Tell them you have taken debt advice and that you will be going bankrupt. Most will put your account on hold.
Apply for a grant to pay your Bankruptcy fee
There are several charitable organisations that offer grants designed to pay your Bankruptcy fee on your behalf. The organisations we are currently aware of that offer grants are listed below. They may be worth contacting for further information.
In addition to the list above check out TURN2US. This is a charitable organisation who may be able to connect you with suitable grant providers.
You may be eligible for a grant based on the fact you have a low income, health issues or other specific needs. Before you can apply you will normally have to be affiliated in some way with the organisation. In the case of the energy trusts you usually need to be one of their customers.
In the past if you were in receipt of certain benefits you may have been eligible for a reduced bankruptcy fee. Since the application moved online in April 2016 this is no longer the case. Everyone has to pay the full amount regardless of status and income.
Consider a Debt Relief Order (DRO)
If your debts are less than £20,000 rather than bankruptcy you could consider the option of a Debt Relief Order (DRO). This gives a very similar outcome to bankruptcy but costs just £90.
Unfortunately not everyone can do a DRO. There are strict qualification criteria which you must meet before you can apply. Your debt has to be below £20,000. In addition you cannot be a homeowner. This applies even if your property is in negative equity or there is no prospect of releasing funds.
On top of this your disposable income must be £50 or less a month. This is the surplus income you have left each month after all your essential living costs are paid. Your assets must also be worth less than £1000. This is only the second hand value however, which is usually very low. You car if you own one must also be worth £1000 or less.
You can also consider the alternative debt solutions that do not require an upfront fee. These include the IVA and debt management plan. If you use either of these it does not mean you cannot change your mind and go bankrupt in the future.
Arrange a call with a Bankruptcy Expert
Your information will be held in strictest confidence and used to contact you by our internal team only. We will never share your details with any third party without your permission.