A reader asked “I can’t afford to go bankrupt! Is there anyone else that can help with the fees apart from British Gas as I don’t have gas?”
The bankruptcy fees in England and Wales are £700 at the moment (£525 Official Receiver’s fee and £175 count fee) which is just stupidly high – most people go bankrupt because they are broke and they don’t have hundreds of pounds in their bank account. On Debt Camel’s bankruptcy information page, British Gas Trust is recommended as a charity that can sometimes help. But what are your other options?
Help with the court fees
If you are getting means tested benefits such as JSA, ESA or Pension Credit, you won’t have to pay the £175 court fee, see this information on whether you will qualify. You need to complete the application form at the end of that link and take it to the court when you bankrupt.
If you have any valuable assets that you will lose when you go bankrupt, it makes sense to sell them beforehand to raise the money for the bankruptcy fees. Keep a record of what you sold and for what price.
(nb You need to be careful that you are selling them for a fair price if you are selling something to a relative or a friend. You can’t sell your two-year old Porsche to your brother for £1,000 – if you try this the Official Receiver will demand your brother returns the car – but if you use the Parkers valuation you will be fine. If you want to sell jewelry to a relative, get an independent valuation first etc.)
Help from charities
Many utility companies run trust funds that help customers with utility debts and other financial problems, including paying bankruptcy fees. The following is a partial list: British Gas, EDF Energy, Thames Water, NPower, United Utilities. Most of them prefer the application form to come from a Citizen’s Advice Bureau not you personally, as they need to know that you have had good debt advice that bankruptcy is a suitable option for you.
Some of them will only help with the Official Receiver’s fee, but you may not have to pay the Court Fee if you are on a low income, see above. Some of them have other requirements as well, eg they will not consider applications if you are a homeowner or if you have been bankrupt before. Your local CAB will be able to sort out which ones are appropriate for you.
There may be other charities that can help too. Sometimes these are local, sometimes you may be eligible because of job, for example SSAFA helps people who have served in the armed forces and their families. Turn2Us has a lot of information on grant giving charities or again your local CAB may be able to suggest who to ask.
Save it up!
The other alternative is of course to save up for the fees. If you are currently making payments to your non priority debts, including paying a DMP (or if you are struggling to pay into an IVA that you have decided to give up on), then you should stop, not even making token payments, and save this money up. When you get cross letters and calls from your creditors, tell them you are going to go bankrupt.