Tribunals, Courts and Enforcement Act 2007 (c. 15)

(The document as of February, 2008)

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(b) failing to produce records of that kind on demand by the official receiver;

(c) entering into a transaction at an undervalue in the period beginning two years before the application date for the debt relief order and ending with the date of the determination of that application;

(d) giving a preference in the period beginning two years before the application date for the debt relief order and ending with the date of the determination of that application;

(e) making an excessive pension contribution;

(f) a failure to supply goods or services that were wholly or partly paid for;

(g) trading at a time, before the date of the determination of the application for the debt relief order, when the debtor knew or ought to have known that he was himself to be unable to pay his debts;

(h) incurring, before the date of the determination of the application for the debt relief order, a debt which the debtor had no reasonable expectation of being able to pay;

(i) failing to account satisfactorily to the court or the official receiver for a loss of property or for an insufficiency of property to meet his debts;

(j) carrying on any gambling, rash and hazardous speculation or unreasonable extravagance which may have materially contributed to or increased the extent of his inability to pay his debts before the application date for the debt relief order or which took place between that date and the date of the determination of the application for the debt relief order;

(k) neglect of business affairs of a kind which may have materially contributed to or increased the extent of his inability to pay his debts;

(l) fraud or fraudulent breach of trust;

(m) failing to co-operate with the official receiver.

(3) The court shall also, in particular, consider whether the debtor was an undischarged bankrupt at some time during the period of six years ending with the date of the application for the debt relief order.

(4) For the purposes of sub-paragraph (2)--

"excessive pension contribution" shall be construed in accordance with section 342A;
"preference" shall be construed in accordance with paragraph 10(2) of Schedule 4ZA;
"undervalue" shall be construed in accordance with paragraph 9(2) of that Schedule.

Timing of application for order

3 An application for a debt relief restrictions order in respect of a debtor may be made--

(a) at any time during the moratorium period relating to the debt relief order in question, or

(b) after the end of that period, but only with the permission of the court.

Duration of order

4 (1) A debt relief restrictions order--

(a) comes into force when it is made, and

(b) ceases to have effect at the end of a date specified in the order.

(2) The date specified in a debt relief restrictions order under sub-paragraph (1)(b) must not be--

(a) before the end of the period of two years beginning with the date on which the order is made, or

(b) after the end of the period of 15 years beginning with that date.

Interim debt relief restrictions order

5 (1) This paragraph applies at any time between--

(a) the institution of an application for a debt relief restrictions order, and

(b) the determination of the application.

(2) The court may make an interim debt relief restrictions order if the court thinks that--

(a) there are prima facie grounds to suggest that the application for the debt relief restrictions order will be successful, and

(b) it is in the public interest to make an interim debt relief restrictions order.

(3) An interim debt relief restrictions order may only be made on the application of--

(a) the Secretary of State, or

(b) the official receiver acting on a direction of the Secretary of State.

(4) An interim debt relief restrictions order--

(a) has the same effect as a debt relief restrictions order, and

(b) comes into force when it is made.

(5) An interim debt relief restrictions order ceases to have effect--

(a) on the determination of the application for the debt relief restrictions order,

(b) on the acceptance of a debt relief restrictions undertaking made by the debtor, or

(c) if the court discharges the interim debt relief restrictions order on the application of the person who applied for it or of the debtor.

6 (1) This paragraph applies to a case in which both an interim debt relief restrictions order and a debt relief restrictions order are made.

(2) Paragraph 4(2) has effect in relation to the debt relief restrictions order as if a reference to the date of that order were a reference to the date of the interim debt relief restrictions order.

Debt relief restrictions undertaking

7 (1) A debtor may offer a debt relief restrictions undertaking to the Secretary of State.

(2) In determining whether to accept a debt relief restrictions undertaking the Secretary of State shall have regard to the matters specified in paragraph 2(2) and (3).

8 A reference in an enactment to a person in respect of whom a debt relief restrictions order has effect (or who is "the subject of" a debt relief restrictions order) includes a reference to a person in respect of whom a debt relief restrictions undertaking has effect.

9 (1) A debt relief restrictions undertaking--

(a) comes into force on being accepted by the Secretary of State, and

(b) ceases to have effect at the end of a date specified in the undertaking.

(2) The date specified under sub-paragraph (1)(b) must not be--

(a) before the end of the period of two years beginning with the date on which the undertaking is accepted, or

(b) after the end of the period of 15 years beginning with that date.

(3) On an application by the debtor the court may--

(a) annul a debt relief restrictions undertaking;

(b) provide for a debt relief restrictions undertaking to cease to have effect before the date specified under sub-paragraph (1)(b).

Effect of revocation of debt relief order

10 Unless the court directs otherwise, the revocation at any time of a debt relief order does not --

(a) affect the validity of any debt relief restrictions order, interim debt relief restrictions order or debt relief restrictions undertaking which is in force in respect of the debtor;

(b) prevent the determination of any application for a debt relief restrictions order, or an interim debt relief restrictions order, in relation to the debtor that was instituted before that time;

(d) prevent the institution of an application for a debt relief restrictions order or interim debt relief restrictions order in respect of the debtor, or the offer or acceptance of a debt relief restrictions undertaking by the debtor, after that time. "

Section 108(3)

SCHEDULE 20 Debt relief orders: consequential amendments

Part 1 Amendments to the Insolvency Act 1986

1 The Insolvency Act 1986 (c. 45) is amended as follows.

2 (1) In section 31 (disqualification of bankrupt) in subsection (1)--

(a) at the end of paragraph (a) (before "or") insert--

" (aa) a moratorium period under a debt relief order applies in relation to him, " ;

(b) in paragraph (b) after "order" insert "or a debt relief restrictions order".

(2) In the heading to that section after "bankrupt" insert "or person in respect of whom a debt relief order is made".

3 After section 274 insert--

" 274A Debtor who meets conditions for a debt relief order

(1) This section applies where, on the hearing of a debtor's petition--

(a) it appears to the court that a debt relief order would be made in relation to the debtor if, instead of presenting the petition, he had made an application under Part 7A; and

(b) the court does not appoint an insolvency practitioner under section 273.

(2) If the court thinks it would be in the debtor's interests to apply for a debt relief order instead of proceeding on the petition, the court may refer the debtor to an approved intermediary (within the meaning of Part 7A) for the purposes of making an application for a debt relief order.

(3) Where a reference is made under subsection (2) the court shall stay proceedings on the petition on such terms and conditions as it thinks fit; but if following the reference a debt relief order is made in relation to the debtor the court shall dismiss the petition. "

4 In section 384(2) (meaning of prescribed amount)--

(a) at the beginning of the list of provisions insert "section 251S(4);";

(b) in the list omit "and" after "section 361(2);" and

5 (1) Section 385(1) (definitions) is amended as follows.

(2) In the definition of "the debtor", before paragraph (a) insert--

" (za) in relation to a debt relief order or an application for such an order, has the same meaning as in Part 7A, " .

(3) After the definition of "debtor's petition" insert--

" "debt relief order" means an order made by the official receiver under Part 7A; " .

6 (1) Section 390 (persons not qualified to act as insolvency practitioners) is amended as follows.

(2) In subsection (4) after paragraph (a) insert--

" (aa) a moratorium period under a debt relief order applies in relation of him, " .

(3) In subsection (5) after "order" insert "or a debt relief restrictions order".

7 (1) Section 399 (appointment etc of official receivers) is amended as follows.

(2) In subsection (1) for "or individual voluntary arrangement" (in both places) substitute ", individual voluntary arrangement, debt relief order or application for such an order".

(3) In subsection (4) for "or individual voluntary arrangement" substitute ", individual voluntary arrangement, debt relief order or application for such an order".

8 In section 412(1) (individual insolvency rules) for "Parts VIII to XI" substitute "Parts 7A to 11".

9 (1) Section 415 (fees orders) is amended as follows.

(2) In subsection (1) before paragraph (a) insert--

" (za) the costs of persons acting as approved intermediaries under Part 7A, " .

(3) In that subsection in paragraph (a) for "Parts VIII to XI" substitute "Parts 7A to 11".

10 In section 415A (fees orders: general), before subsection (1) insert--

" (A1) The Secretary of State--

(a) may by order require a person or body to pay a fee in connection with the grant or maintenance of a designation of that person or body as a competent authority under section 251U, and

(b) may refuse to grant, or may withdraw, any such designation where a fee is not paid. "

11 In section 418(1) (monetary limits)--

(a) at the beginning of the list of provisions insert--

" section 251S(4) (maximum amount of credit which a person in respect of whom a debt relief order is made may obtain without disclosure of his status); " ;

(b) at the end of the list of provisions insert--

" paragraphs 6 to 8 of Schedule 4ZA (maximum amount of a person's debts, monthly surplus income and property for purposes of obtaining a debt relief order); " .

12 (1) Section 426A (disqualification from Parliament) is amended as follows.

(2) In subsection (1) after "bankruptcy restrictions order" insert "or a debt relief restrictions order".

(3) In subsection (5) after "interim order" insert ", or a debt relief restrictions order or an interim debt relief restrictions order,".

(4) In subsection (6) after "bankruptcy restrictions undertaking" insert "or a debt relief restrictions undertaking".

13 (1) Section 426B (devolution) is amended as follows.

(2) In subsection (1) after "Wales," insert "or makes a debt relief restrictions order or interim debt relief restrictions order in respect of such a member,".

(3) In subsection (2) after "bankruptcy restrictions undertaking" insert "or a debt relief restrictions undertaking".

14 (1) Schedule 9 is amended as follows.

(2) In paragraph 1 for "Parts VIII to XI" substitute "Parts 7A to 11".

(3) In paragraph 5 for "Parts VIII to XI" substitute "Parts 7A to 11".

(4) In paragraph 6 for "Parts VIII to XI" substitute "Parts 7A to 11".

(5) After paragraph 7 insert--

" Debt relief orders

7A Provision as to the manner in which the official receiver is to carry out his functions under Part 7A.

7B Provision as to the manner in which any requirement that may be imposed by the official receiver on a person under Part 7A is to take effect.

7C Provision modifying the application of Part 7A in relation to an individual who has died at a time when a moratorium period under a debt relief order applies in relation to him.

Debt relief restrictions orders and undertakings

7D Provision about debt relief restrictions orders, interim orders and undertakings, including provision about evidence.

Register of debt relief orders and debt relief restrictions orders etc

7E Provision about the register required to be maintained by section 251W and the information to be contained in it, including provision--

(a) enabling the amalgamation of the register with another register;

(b) enabling inspection of the register by the public. "

15 (1) The Table in Schedule 10 (punishment of offences) is amended as follows.

(2) In the entry relating to section 31, in the column describing the general nature of the offence, after "bankrupt" insert "or person in respect of whom a debt relief order is made".

(3) Insert the following entries after the entry relating to section 235(5)--

" 251O(1)	False representations or omissions in making an application for a debt relief order.	1. On indictment 2. Summary	7 years or a fine, or both. 12 months or the statutory maximum, or both.
251O(2)(a)	Failing to comply with duty in connection with an application for a debt relief order.	1. On indictment 2. Summary	2 years or a fine, or both. 12 months or the statutory maximum, or both.
251O(2)(b)	False representations or omissions in connection with duty in relation to an application for a debt relief order.	1. On indictment 2. Summary	7 years or a fine, or both. 12 months or the statutory maximum, or both.
251O(4)(a)	Failing to comply with duty in connection with a debt relief order.	1. On indictment 2. Summary	2 years or a fine, or both. 12 months or the statutory maximum, or both.
251O(4)(b)	False representations or omissions in connection with a duty in relation to a debt relief order.	1. On indictment 2. Summary	7 years or a fine, or both. 12 months or the statutory maximum, or both.
251P(1)	Failing to deliver books, records and papers to official receiver, concealing or destroying them or making false entries in them by person in respect of whom a debt relief order is made.	1. On indictment 2. Summary	7 years or a fine, or both. 12 months or the statutory maximum, or both.
251P(2)	Person in respect of whom debt relief order is made doing anything falling within paragraphs (c) to (e) of section 251P(1) during the period of 12 months ending with the application date or doing anything falling within paragraphs (b) to (e) of section 251P(1) after that date but before the effective date.	1. On indictment 2. Summary	7 years or a fine, or both. 12 months or the statutory maximum, or both.
251Q(1)	Fraudulent disposal of property by person in respect of whom a debt relief order is made.	1. On indictment 2. Summary	2 years or a fine, or both. 12 months or the statutory maximum, or both.
251R(1)	Disposal of property that is not paid for by person in respect of whom a debt relief order is made.	1. On indictment 2. Summary	7 years or a fine, or both. 12 months or the statutory maximum, or both.
251R(2)	Obtaining property in respect of which money is owed by a person in respect of whom a debt relief order is made.	1. On indictment 2. Summary	7 years or a fine, or both. 12 months or the statutory maximum, or both.
251S(1)	Person in respect of whom a debt relief order is made obtaining credit or engaging in business without disclosing his status or name.	1. On indictment 2. Summary	2 years or a fine, or both. 12 months or the statutory maximum, or both. "

(4) In the application of those entries in relation to offences committed before the commencement of section 154(1) of the Criminal Justice Act 2003 (c. 44) (limit on magistrates' court powers to impose imprisonment), the references in the fourth column to "12 months" are to be read as references to "6 months".

Part 2 Amendments to other legislation

16 (1) Section 11(1) of the Company Directors Disqualification Act 1986 (c. 46) (undischarged bankrupts) (as substituted in relation to England and Wales by the Enterprise Act 2002 (c. 40)) is amended as follows.

(2) At the end of paragraph (a) (before "or") insert--

" (aa) a moratorium period under a debt relief order applies in relation to him, " .

(3) In paragraph (b) after "bankruptcy restrictions order" insert "or a debt relief restrictions order".

17 In section 183(2) of the Employment Rights Act 1996 (c. 18) (insolvency of an employer who is individual), in paragraph (a) before sub-paragraph (i) insert--

" (ai) a moratorium period under a debt relief order applies in relation to him, " .

Sections 111 and 113

SCHEDULE 21 Regulations under sections 111 and 113

1 The first column of this table lists the matters referred to in sections 111(3) and 113(5).

2 A matter listed in the first column includes the aspects set out in the appropriate part of the second column.

Matter about which particular provision may be made:	Including these aspects:
1. The scheme operator.	(a) The constitution of the scheme operator. (b) The governance of the scheme operator. (c) The size of the scheme operator's undertaking. (d) The financial standing of the scheme operator. (e) Whether or not a scheme operator is a profit-making organisation.
2. The terms of a debt management scheme.	(a) The non-business debtors to whom the scheme is open. (b) The kinds of debts which may be specified in a plan arranged in accordance with the scheme.
3. The operation of a debt management scheme.	(a) How decisions are made about whether debt repayment plans are to be arranged. (b) How debt repayment plans are arranged. (c) How decisions are made about the terms of debt repayment plans, including decisions about-- (i) what payments will be required in relation to the specified debts; (ii) the amounts, times and recipients of payments; (iii) the duration of the plan. (d) The format of debt repayment plans. (e) When debt repayment plans begin to have effect. (f) How changes are to be made to debt repayment plans (including the specification of debts after a plan has been arranged). (g) How decisions are made about whether debt repayment plans are to be terminated. (h) How debt repayment plans are terminated.
4. Changes that affect the scheme operator.
5. Changes to-- (i) the terms of a debt management scheme; (ii) the operation of a debt management scheme.	(a) Whether changes may be made. (b) How changes are made. Pages: P.1 \| P.2 \| P.3 \| P.4 \| P.5 \| P.6 \| P.7 \| P.8 \| P.9 \| P.10 \| P.11 \| P.12 \| P.13 \| P.14 \| P.15 \| P.16 \| P.17 \| P.18 \| P.19 \| P.20 \| P.21 \| P.22 \| P.23 \| P.24 \| P.25 \| P.26 \| P.27 \| P.28 -- Back -- Stat	Other