Insolvency Service Increases Bankruptcy and Liquidation Fees

The Insolvency Service has introduced changes to the deposits for creditor bankruptcy and compulsory liquidations.

The petition deposit is a sum paid up-front by the petitioner and the Insolvency Service has announced a rise of the fees effective from 1 November 2022.

 Current feeFee from 1 November 2022
Creditors’ bankruptcy petition deposit£990.00£1,500.00
Company liquidation petition deposit£1,600.00£2,600.00

**There will be no change to the adjudicator petition deposit where the individual applies for their own bankruptcy.

Each creditor bankruptcy or liquidation case administered by an Official Receiver is partly funded through a deposit paid by the petitioner to initiate the process.

The deposit contributes to the Official Receiver’s administration costs, with the remainder of their costs recovered through fees charged against assets realised during the bankruptcy or liquidation proceedings.

If there are sufficient assets to recover all the fees and costs, then the deposit is returned to the party who initiated the insolvency.

Fees have not changed since April 2016 and although the Insolvency Service continues to take steps to reduce operating costs it has stated that the deposit increase will enable the Service to continue to administer and investigate personal and commercial debt insolvencies effectively, maximising outcomes for creditors whilst mitigating the risk of cost recovery being passed on to the taxpayer.

The Insolvency Service has been releasing monthly company and individual insolvency statistics for England and Wales (as well as Northern Ireland and Scotland), throughout the COVID-19 pandemic, and thereafter.  However, it must be noted that the statistics are marked ‘experimental’ since the process of compiling insolvency data in monthly format is new to the statistics team at the Insolvency Service and is subject to review and, currently,  the Insolvency Service does not record whether an insolvency is directly related to the coronavirus pandemic.

Company insolvency statistics for England and Wales.

In August 2022 there was a total of 1,933 company insolvencies in England and Wales, which included:

  • 1,662 creditors’ voluntary liquidations (CVLs)
  • 142 compulsory liquidations
  • 116 administrations
  • 13 company voluntary arrangements (CVAs)
  • 0 receiverships

Overall company insolvencies in August 2022 were 73% higher when compared to August 2019 (pre-pandemic) and 33% higher than insolvencies recorded in August 2021.

Individual insolvency statistics for England and Wales – In August 2022, there were:

  • 565 bankruptcies (491 debtor applications and 74 creditor petitions)
  • 1,932 DROs
  • 7,340 IVAs registered (using a three-month rolling average)
  • Bankruptcies

Bankruptcies in August 2022 were 10% cent lower than in August 2021 and this was driven by a drop in debtor applications (11% lower) and creditor petitions (1% lower). Compared to August 2019, total bankruptcies were 58% lower.

Debt relief orders (DRO)

The number of DROs in August 2022 were similar to August 2019, but 12% higher than in August 2021.

Individual voluntary arrangements (IVA)

IVA numbers are calculated using different methodology and are presented separately to debt relief orders (DROs) and bankruptcies. IVAs in August 2022 were 5% higher when compared to the average number of registered IVAs during the three months ending August 2021 and 8% higher than the three months ending August 2019.

Breathing Space registrations

In August 2022 there were 6,058 Breathing Space registrations. This is 25% higher than the number in August 2021. The Breathing Space registrations in August 2022 comprised of:

5,971 Standard breathing space registrations, which is 25% higher than the number in August 2021

87 Mental Health breathing space registrations, which is 30% higher than the number in August 2021

If you have any queries concerning this article, please contact Allison Thompson, Head of Debt Recovery on 0191 2267878.

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