THE Government has increased the cost of going bankrupt just two months after it claimed it was making it cheaper for bust borrowers to go through the process.
The move by the State to impose extra charges on those who are penniless has been greeted with disbelief.
Higher costs will result from the fact that the stamp duty for those seeking bankruptcy will double.
The changes mean it will now cost a minimum of €900 for each individual voluntarily seeking bankruptcy. This cost will double for a couple. The move comes just days after the new shorter bankruptcy regime finally got under way.
This week, the High Court recorded its highest ever single day of bankruptcies – with one person adjudicated a bankrupt every three minutes during the first half-hour.
The surge in bankruptcies was prompted by a new insolvency law that came into effect last year, offering a range of possible debt deals for over-indebted borrowers.
Bankruptcy fees were also slashed in December and the discharge period reduced from 12 to three years, paving the way for more bankruptcies.
But many debtors cannot reach deals with their banks or do not meet the minimum income guidelines set down by the Insolvency Service of Ireland, triggering a new wave of bankruptcies.
Despite claiming to have lowered the cost for bust borrowers getting their debts wiped out, the Irish Independent has learnt that the Department of Justice has now more than doubled the stamp duty that has to be paid by those declaring themselves bankrupt.
The head of personal insolvency and bankruptcy services at RSM Farrell Grant Sparks, Michael Keenan, said the higher fee was being imposed on people with no income and few assets. He said the change amounted to an increase of €107.
The fees include €650 for the official assignee, €190 in stamp duty, another €20 for a separate stamp duty, and €50 to advertise the bankruptcy petition in 'Iris Oifigiuil'.
"We deal with cases across the country. When we called some people about the additional cost payable to the State, there was genuine disbelief at the other end of the phone. We share that disbelief," he said.
Mr Keenan added: "There should be improvements, not extra charges by the State."
The Department of Justice said Minister Alan Shatter had made bankruptcy petitions less expensive by removing the need to advertise the petition in a national newspaper.
This move last December removed a cost of between €500 and €700 per individual.
Asked why the State was now attempting to claw back more money from bankrupts, the spokeswoman said the overall cost was now down from around €1,400 to €910.
"The new fee orders should be seen in the context of the overall savings effected and in the context of ensuring the proper administration of the courts system," she added.