calendar11 May 2016

Mark Cowley's avatar Mark Cowley


Last month saw the biggest improvement to the bankruptcy process in England & Wales for 30 years, with the launch of a new online Government service allowing people to apply for their own bankruptcy via the internet.

Before this change, there’s no doubt, the process was complicated and daunting. Anyone who requested a bankruptcy had to go in person to their local county court – a pretty intimidating thought for many people. The paperwork was long and complicated (and needed to be in triplicate!) This took a long time and was costly for both the court staff and the client.

On April 6, the Government’s Insolvency Service switched to a new system called ‘Online Debt Solutions’ (ODS). This now allows someone to apply for bankruptcy through a secure, online application form. The online version tailors the questions as you go along, which makes life much simpler. For example, it is smart enough to only ask the questions about property ownership if the person is a homeowner instead of the client having to wade through pages of unnecessary questions.

Well, what about people with no internet access? So far, our experience shows our clients have been able to easily submit their applications with some guidance from their local CAP Debt Coaches who can check through their online form and click ‘submit’.

One of our Debt Coaches sent in this story about a soon-to-be bankrupt client, Stephen:

I helped Stephen check and submit the form today. He pressed the submit button then gave me a big hug, danced (literally) round the office and went down to the Drop-In (where there were three brand new clients) singing at the top of his voice and saying ‘if Ruth and CAP can help me then they can help anyone!’

One of the benefits of the new online system is the cheaper upfront application fee. Previously it was £705, now it’s £655 per applicant which, on the face of it, seems like a better deal and helps people feel it’s not such a big hurdle. However, here’s the whole story: previously, when the bankruptcy applications were presented at court, the poorest clients had a opportunity to apply for a discount, bringing the cost down to £525. Around half of CAP clients petitioning for bankruptcy were eligible for this discounted fee and this is no longer available via online bankruptcy.  So, the result is that the fee has effectively increased for thousands of the poorest people, which, of course, is not welcome.

While designing, building, and rolling-out this brand new online system, the Insolvency Service’s ODS project team has carried out extensive research to gather the opinions and requirements of all the different users of this new system – creditors, Insolvency Service staff, third party advice agencies like CAP, and of course people in debt.

We have seen at first hand the real desire of the project team to make the online service as pain-free as possible and we believe they have achieved that. Hopefully, we’ll hear of many more clients as happy as Stephen as they find a way forward from their debt problems.


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