Upcoming increase in deposit fees for initiating bankruptcy proceedings and compulsory liquidation of creditors

From November 1, 2022, the insolvency administrator filing fee to be paid by claimants initiating bankruptcy or creditors’ liquidation proceedings will increase. For bankruptcy petitions by creditors the fees will rise from £990 to £1,500 and for court-ordered liquidation proceedings they will rise from £1,600 to £2,600. These increases are the first since April 2016 and would have been introduced, at least in part, due to the relatively low level of recent bankruptcies.

Filing fees contribute to the Official Receiver’s costs in administering a creditor’s bankruptcy or liquidation. However, if the assets realized during the bankruptcy or liquidation proceedings are sufficient to cover the costs of the Juge-commissaire, the deposit is returned to the plaintiff.

Although the number of court-ordered liquidations remains below pre-pandemic levels, it is reported that a large number of outstanding cases have insufficient asset values ​​to cover the costs of administering the official receiver. According to the government’s website, the increase in filing fees “will therefore enable the insolvency service to continue to effectively administer and investigate insolvencies, maximizing results for creditors while mitigating the risk that the recovery of costs are passed on to the taxpayer”.

The low number of recent compulsory liquidations has been driven in part by government pandemic measures designed to support businesses, including an increase in the debt threshold for a liquidation request to £10,000, from the previous threshold of £750. Despite speculation that the £10,000 limit would remain, it fell on March 31, 2022.

The increase in filing costs may therefore present a new hurdle for creditors in collecting low levels of corporate or personal debt (for which the debt threshold is £5,000) as the cost of collection may in exceeds the debt due.


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