It usually comes as a shock to many people that bankruptcy fees apply when they want to go bankrupt. It is an unfortunate fact that processing a bankruptcy costs and there is no getting away from that. This article explains what the bankruptcy fees are and how they can be paid.

Firstly there is the court fee. At the time of writing it stands at £150, although it is means tested. This means that if you are in receipt of benefits then you may be eligible to have the court fee waived. Overall, this will make the bankruptcy fees slightly less for you.

There is also a fee payable known as the deposit. The deposit is payable in all cases, regardless of your financial position. At the time of writing the deposit is £450 and is used as a contribution in the costs of administering your bankruptcy. Once the court receives this fee it should be paid across to the Official Receiver attached to that court.

If the bankruptcy petition is dismissed or withdrawn then the deposit element of the bankruptcy fee will be repaid unless it is required for fees relating to the appointment of an insolvency practitioner to investigate the feasibility of an individual voluntary arrangement. If a bankruptcy order is made then the deposit will only be returned in the instance that realisations of assets are sufficient to meet the costs of the bankruptcy.

This means that if you are employed then you can expect to pay bankruptcy fees of £600. Although this sounds a lot to someone about to go bankrupt, it is far less than the total costs of administering the bankruptcy. If the full administration costs had to be paid by the debtor then bankruptcy would certainly become unaffordable for almost all people.

In the past, the requirement to pay bankruptcy fees, in particular the deposit payable has been challenged at court. The challenge was that the requirement to pay this fee infringed an individual's constitutional right at common law of access to justice. Unfortunately this challenge has failed.

So what do the bankruptcy fees cover? Without going in to too much detail the costs of a bankruptcy can become significant, particularly if there are assets to realise. Remember, there is also an investigation into the bankrupt's affairs. This can also become protracted.

It is also worth a quick discussion on bankruptcy advice. There are various different forms of advice but if you want a professional then unfortunately there will be fees involved. Is it worth paying? In many cases yes. Bankruptcy can be complex and the consequences can be more than financial in nature.

A charity is one source of help in which you will not usually incur any advisory fees. However, before embarking on free help though you should realise that the help and service on offer will not usually be comparable to that from a qualified professional who is experience in dealing with bankruptcy matters. By seeking advice early you may be able to save yourself in the long term.