Bankruptcy goes online

The law has been changed so that, from 6th April, people will be able to go online to go bankrupt.

The Government argues that “the decision to take bankruptcy out of the courts is one of the reforms being made to ensure that people in financial crisis get swift access to the right insolvency remedy.” The Government’s stated belief is that many people are intimidated by the idea of going to court and so will not consider the bankruptcy option, even though they are in financial crisis and urgently need debt relief. The sub-text is perhaps that people are being “sold” IVAs where ‘best advice’ would be that bankruptcy is the best option for them.

The online bankruptcy site will apparently “prompt and provide individuals with details on how and where to contact an authorised debt advisor.” Also, applications for bankruptcy submitted online will be determined by an Adjudicator within the Insolvency Service.

It remains to be seen whether these safeguards will be sufficient or whether there are problems with people finding it too easy to declare bankruptcy in desperation in the wee small hours when they might have been better taking more than one opinion before making their choice. We are always happy to guide people faced with this decision – although historically, we do tend to find that for the majority of such cases, we end up providing reassurance that bankruptcy is the best option in their specific circumstances. Contact us.