Bankruptcy applications move online

From 6th April 2016, all applications by individuals wishing to make themselves bankrupt must be made online using a portal on the Government’s Gov.uk website.

Previously, anyone who wants to go bankrupt had to make an application – or ‘petition’ – to their local county court, which would deal with the petition either at a full hearing or by a Judge sitting in chambers.

The Government’s Insolvency Service which is responsible for administering the bankruptcy regime in England and Wales have decided that the court petition procedure is cumbersome, expensive and can act as a barrier for those who need to access bankruptcy to deal with high levels of over-indebtedness. Bankruptcy petitions by debtors are very rarely contentious – it is rare for anyone to object that an individual is wrongly petitioning for bankruptcy – so in future applications will be made online using the Gov.uk website and an adjudicator will review the applications and decide whether to make the order.

This modernisation of the bankruptcy regime is to be broadly welcomed, however it is worrying if an individual can make an application online without the opportunity to discuss their financial affairs with an advisor who may be able to assist them with exploring all their options. There is no requirement for a debtor to seek advice prior to making an application. Time will tell whether this leads to bankruptcy orders being made in circumstances where it is not the best option for the individual concerned.