What costs will be incurred in bankruptcy?

The following costs must be paid (in addition to amounts owed to creditors) from the assets available in the bankruptcy estate:

Official Receiver's fee £1,715

Interest on debts At least 8% per annum

Petitioning creditor's costs Usually range from £950 to £3,500. These will be much less of you have petitioned for your own bankruptcy

Solicitor's costs where Trustee has employed their services This can range from £nil to several thousand pounds

Trustee's remuneration Where an independent trustee is appointed he will usually seek approval from creditors for his fees to be paid on a time spent basis. With hourly charge out rates ranging from £80 to £500 per hour, such costs can accumulate very quickly. It's not unusual for costs to recah £7,500 plus VAT in a relatively short period of time. These fees frequently spiral out of control when there are delays.

Secretary of State fees are charged at £2,825 on the first £5,200 of realisations then at 15% on any further realisations (the maximum fee is £80,000)

Someone with debts of only £10,000 could easily find themselves in the unfortunate position of having to sell assets to raise around £28,000 or more to repay the debts, costs and expenses of the bankruptcy in full. These costs can be substantially reduced by getting the bankruptcy order cancelled / annulled.

If you have no assets, these costs need not be paid.

Getting in touch with an insolvency expert for free debt advice is as easy as picking up the phone. Call the Re10 Debt Advice Helpline on free phone 0800 169 1536