From 6 April 2016 an application for an individual resident in England and Wales to go bankrupt will be an online procedure (in Northern Ireland, the changes will apply from November 2016). This change was brought about by the Enterprise and Regulatory Reform Act 2013.

A debtor will complete an online application to be reviewed by a newly created “Adjudicator”, where previously an application was made in person to the Court. As a result of the changes the court will only be involved in a minority of cases involving an appeal or a post-order application, thus freeing up court time.

The introduction of this streamlined application procedure is password protected and will allow an individual to login online to complete the required forms.

The application fee for the Adjudicator will be £130, which will be £50 less than previously charged and can be paid in instalments using a debit card. To some extent this follows the USA bankruptcy procedure where payment can also be made in instalments. The new UK system has gone a step further: The fee will be waived in cases where income is less than 150% of the official poverty line.

Not surprisingly, the Insolvency Service must be vigilant with respect to abuse, particularly with the old contentious subject of “Bankruptcy Tourism”.

The reduced fee is not the only incentive here for applying online. It is now a much simpler self-service process with minimal formality. Using the services of an agent for example to guide the debtor through the process of the court application would cost up to an additional £500.

The last word must go to a quote from the Insolvency Service Chief Executive, Sarah Albon, who stated that the “Service wanted to better support debtors, creditors and investors, and at the same time continue to modernise the public services offered to those struggling with problem debt.”