Deposits payable on presentation of bankruptcy and winding-up petitions to increase from 1 November 2022

A significant increase in the costs payable by creditors commencing insolvency proceedings against a debtor (both individual and corporate) comes into effect from 1 November 2022.

When a creditor presents a winding-up petition against a debtor company or a bankruptcy petition against an individual debtor, they have to pay a court fee (currently £302) plus an additional fee, referred to as the Official Receiver’s deposit.

The purpose of the Official Receiver’s deposit is to contribute to the funding of the Insolvency Service’s costs of administering the insolvency once the court has made an order putting the debtor company into compulsory liquidation or making the individual debtor bankrupt.

From 1 November 2022, the Official Receiver’s deposit will increase as follows:

• for creditors’ bankruptcy petitions from £990 to £1,500.
• for creditors’ winding-up petitions from £1,600 to £2,600.

Whilst the deposit was last increased in 2016, the increase now (after the long period where creditor action against debtor companies was limited by temporary protections in place as a result of the Covid-19 pandemic) is expected to significantly impact on creditors’ commercial considerations when deciding whether to pursue a debtor by way of insolvency proceedings.

It should be noted that, if a creditor’s winding-up petition or bankruptcy petition does not result in a subsequent winding-up order or bankruptcy order (for example, if the debtor finally pays up before the final court hearing), then the deposit (subject to a small admin fee) is returned to the creditor.

In insolvencies where the Official Receiver (or other Insolvency Practitioner subsequently appointed as Liquidator or Trustee in Bankruptcy) is able to collect in sufficient assets of the debtor (“realisations”) to cover the costs and expenses of the administration of the insolvency, the creditor’s costs of petitioning take priority over all other unsecured creditors, and the deposit repaid to the creditor.

Contact our insolvency solicitors today

If you need legal assistance in relation to winding-up and bankruptcy petitions, please do not hesitate to get in touch with a member of our Insolvency team or complete this online enquiry form, and we will be happy to assist you with your enquiry.