Cost of declaring bankruptcy in Scotland increases by 100%
The cost of declaring bankruptcy in Scotland rose from £100 to £200 on the 1st June 2012. This seems to be the reason behind a surge of Scottish bankruptcy (sequestration) applications in May.
The charge payable to the Accountant in Bankruptcy (AiB) to declare bankruptcy in Scotland was increased by 100% from £100 to £200 on the 1st June 2012. The AiB said that the increase was introduced to more accurately reflect the rising unit cost of processing the bankruptcy application.
Increase in Bankruptcy applications since May 12
Official statistics from the Accountant in Bankruptcy showed a surge of Bankruptcy applications in May 2012. The driver for this is largely considered to be people trying to get their bankruptcy applications in before the expected increase in the charge. As such the AiB expects application to fall back in the third quarter of the year.
However with the Scottish economy now formally in double dip recession and more and more people suffering with falling incomes, the increasing numbers applying for their own bankruptcy using the Certificate for Sequestration may well continue.
In my view it is unlikely that the increased cost will put many people off who have decided that bankruptcy is the right solution for them. Set at £200, the fee is still significantly lower than the £700 charged in England and Wales and in addition there is provision to pay the fee in smaller instalments after which the application can then be made.
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