Stop the broken and failed Bankruptcy  Legal System from Driving Vulnerable People into Poverty

My name is Rosie Kahrani. I am asking Parliament, the Ministry of Justice, the Insolvency Service and the Financial Conduct Authority to investigate and reform a bankruptcy system that I believe allows powerful financial organisations and insolvency professionals to take advantage of vulnerable people.

I am not asking to escape a lawful debt. I am asking for fairness, transparency and proportionality.

My bankruptcy began with an original debt of approximately £24,000 owed to Kingsway Asset Finance Ltd. Substantial payments were subsequently made, yet the financial nightmare did not end. Instead, further interest, legal costs, insolvency expenses and trustees’ fees continued to accumulate. We paid £8700 to the official Receiver just  for a few emails. 

The trustees have claimed fees of approximately £30,000 and have pursued an interest in my family home. I believe the total amount demanded from me has become grossly disproportionate to the original debt. We paid the creditor directly. We still do not know what their role in the matter. They forged the invoice with a huge fees with no accountability. 

A system intended to deal fairly with debt should not allow a £24,000 liability to grow into a life-destroying claim involving tens of thousands of pounds in professional fees and the possible loss of a family home.

I was vulnerable, in poor health and unfamiliar with the complexity of English insolvency law. Instead of receiving protection, understanding and a reasonable opportunity to resolve the debt, I felt overwhelmed by a system controlled by organisations with money, specialist lawyers and professional power.

At every stage, the balance of power appeared to favour the creditor, the Official Receiver, the trustees and their solicitors. Ordinary people cannot afford to fight teams of lawyers charging substantial fees. Every attempt to challenge the process creates more legal costs, while those costs may ultimately be taken from the very person who is desperately trying to protect their home and rebuild their life.

This is not justice. It is a pathway to poverty and destitution.

Bankruptcy should offer an honest person a route out of serious financial difficulty. It should not become an opportunity for creditors, insolvency practitioners or associated professionals to generate excessive fees from someone’s misfortune.

Behind every bankruptcy file is a human being. There may be children, illness, disability, trauma and a family home at risk. Vulnerable people must not be treated merely as assets from which further money can be extracted.

My experience has left me frightened, exhausted and facing the possibility of losing my home. No vulnerable person should have to endure this level of pressure simply because they did not have the wealth or legal knowledge necessary to defend themselves.

I am therefore calling upon Parliament and the relevant regulatory authorities to:

Conduct an independent investigation into the conduct, charges and decision-making of trustees, Official Receivers and financial companies in bankruptcy cases involving vulnerable people.
Introduce strict limits and effective scrutiny of trustees’ and solicitors’ fees, particularly where those fees approach or exceed the original debt.
Require all insolvency costs to be reasonable, proportionate, clearly explained and independently approved.
Prevent creditors and insolvency professionals from pursuing a family home where the original debt has been paid or where the remaining dispute principally concerns professional fees and additional charges.
Strengthen protections for people affected by disability, serious illness, mental-health difficulties, limited English or other vulnerabilities.
Require the FCA and the Insolvency Service to investigate complaints properly and take meaningful enforcement action where financial businesses or insolvency professionals act unfairly.
Provide vulnerable people with access to independent legal advice and a genuinely affordable way to challenge excessive fees and abusive conduct.
Require full transparency regarding all payments received, how they have been allocated and how every additional fee has been calculated.
Establish a Parliamentary review of whether the present bankruptcy laws remain fair, proportionate and fit for purpose.
The law should protect vulnerable citizens—not provide a weapon for wealthy and powerful organisations to push them further into poverty.

I am speaking out not only for myself, but for every person who has felt powerless, silenced or financially destroyed by a system they could not understand or afford to challenge. The original creditor’s debt was paid off approximately two years ago, yet the bankruptcy continues because of the substantial and disputed fees claimed by the trustees and their solicitors, Freeths LLP. Costs of this scale risk undermining public confidence in a legal system that should deliver fairness and justice.

Please sign and share this petition. Help us ask Parliament, the FCA, the Ministry of Justice and the Insolvency Service to investigate these practices and reform the bankruptcy system before more vulnerable people lose their homes, their health and their hope. 

A person in debt still deserves dignity, fairness and justice.

Our petition asks Parliament to introduce transparent bankruptcy costs, independent oversight and stronger protection for vulnerable families and non-bankrupt homeowners and a radical reform in the Bankrutpcy law. 

Please sign and share—even one signature can help bring this issue to Parliament’s attention