Insolvency Service increases fees by more than 7%

by Rachael Singh

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14 Mar 2014

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Jenny Willott

THE INSOLVENCY SERVICE has increased its fees by an average of 7.5%, in line with inflation, the government body has said.

From 6 April 2014, fees and deposits for debtors, creditors and companies entering insolvency proceedings will increase.

Debtor making themselves bankrupt will see an increase to £2,375 from £2,240, including all deposits and fees.

For creditors trying to petition for a bankruptcy against a debtor, they will face a collective spend of £2,600, from £2,415. Company compulsory winding-up orders will grow to £3,650 from £3,400 including all deposits and fines.

Insolvency trade body R3 however, warned the government is sending mixed messages.

"We can't help but notice a certain irony in the Insolvency Service putting up its own fees for insolvencies while at the same time proposing a series of potentially harmful changes to the way insolvency practitioners are allowed to set their own fees in certain cases," said R3 vice-president Giles Frampton. 

Earlier this month the Insolvency Service announced plans to cap fees in certain insolvency cases in a consultation which is due to end on 28 March 2014. 

"The increase in the Insolvency Service's fees means that returns from estates will diminish. That is regrettable, but it is important that a proper service is provided to debtors and creditors alike. It is to be hoped that the benefits of a strong and effective insolvency profession are equally understood," he added. 

The Insolvency Service said the increases in the fees it announced this week were in line with inflation and it had not increased fees since 2011.  

Business Minister Jenny Willott (pictured) said: "No one wants to increase fees but today's increases will make sure the Insolvency Service continues to provide a high quality service to those in debt whilst still representing good value for money.

"People petitioning for insolvency are expected to pay their fair share of the cost and the taxpayer should not be responsible for the fee. Only the deposit is paid upfront and the remainder of the fees are collected once assets are realised.

"To make sure the process is accessible to those people who need it, we have not changed the deposits paid by people petitioning for their own bankruptcy.

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Financial Planning and Performance AnalystCabinet Office-Greater London-Competitive

 
 
 
 
 
 
 
 

 

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