OR Deposit Increase – 1st November 2022
In September 2022 the Insolvency Service announced that the Official Receiver deposit, payable on the issue of bankruptcy or winding up proceedings will be increased.
From £990.00 to £1,500.00 for individual bankruptcies, and from £1,600.00 to £2,600.00 for Company liquidations (Winding Up Petitions), with the increase due to take effect from 1st November 2022.
The deposit is payable upon the issue of the petition and is aimed at partially funding the initial administration costs incurred by the Official Receiver.
Whilst insolvency fees generally have not changed since 2016, the increase is significant – between 51% and 62.50%.
The Insolvency Service has justified the increase by stating that it was necessary to enable them to administer and investigate insolvencies effectively, particularly where there are low or no funds available in the insolvent estate.
For creditors, it increases the need to weigh up the costs involved against any likely return from the insolvency. More care and scrutiny should be applied before the issue of proceedings to ensure as far as possible that there are sufficient assets in the insolvent estate to cover not only the increased costs, but to also see a return to creditors.