Tribunals, Courts and Enforcement Bill [HL]

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Session 2006 - 07
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Tribunals, Courts and Enforcement Bill [HL]

Tribunals, Courts and Enforcement Bill [HL]
Schedule 16 — Administration orders: consequential amendments
258

Insolvency Act 1986 (c. 45)
3     (1)
Section 429 of the Insolvency Act 1986 (disabilities on revocation of
administration order against an individual) is amended as follows.
      (2)
For subsections (1) and (2) substitute—
“(1)
This section applies if a county court revokes an administration
5
order made in respect of an individual (“the debtor”) on one of the
relevant grounds.
(2)
The court may, at the time it revokes the administration order, make
an order directing that this section and section 12 of the Company
Directors Disqualification Act 1986 shall apply to the debtor for such
10
period, not exceeding one year, as may be specified in the order.
(2A)
Each of the following is a relevant ground—
(a)
the debtor had failed to make two payments (whether
consecutive or not) required by the order;
(b)
at the time the order was made—
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(i)
the total amount of the debtor’s qualifying debts was
more than the prescribed maximum for the purposes
of Part 6 of the 1984 Act, but
(ii)
because of information provided, or not provided, by
the debtor, that amount was thought to be less than,
20
or the same as, the prescribed maximum.”
      (3)
In subsection (3) for “a person” in the first place substitute “an individual”.
      (4)
In subsection (4) for “a person” substitute “an individual”.
      (5)
In subsection (5) for “person” substitute “individual”.
4     (1)
Section 440 (extent: Scotland) is amended as follows.
25
      (2)
In subsection (2)(a) (provisions in the third Group of Parts that do not extend
to Scotland) for “section 429(1) and (2)” substitute “section 429(1) to (2A)”.
Company Directors Disqualification Act 1986 (c. 46)
5     (1)
Section 12 of the Company Directors Disqualification Act 1986 (failure to
pay under county court administration order) is amended as follows.
30
      (2)
For the title of the section substitute “Disabilities on revocation of
administration order”.
      (3)
Omit subsection (1).
      (4)
In subsection (2), for the words from “that section” to “429(2)(b)” substitute
“section 429 of the Insolvency Act applies by virtue of an order under
35
subsection (2) of that section”.
Courts and Legal Services Act 1990 (c. 41)
6
Omit section 13 of the Courts and Legal Services Act 1990.

Tribunals, Courts and Enforcement Bill [HL]
Schedule 16 — Administration orders: consequential amendments
259

Charities Act 1993 (c. 10)
7     (1)
Section 72 of the Charities Act 1993 (persons disqualified for being trustees
of a charity) is amended as follows.
      (2)
In subsection (1)(f), for the words from “section 429(2)(b)” to the end
substitute “section 429(2) of the Insolvency Act 1986 (disabilities on
5
revocation of county court administration order).”.
Pensions Act 1995 (c. 26)
8     (1)
Section 29 of the Pensions Act 1995 (persons disqualified for being trustees
of a trust scheme) is amended as follows.
      (2)
In subsection (1)(f), for the words from “section 429(2)(b)” to the end
10
substitute “section 429(2) of the Insolvency Act 1986 (disabilities on
revocation of county court administration order).”.
Police Act 1996 (c. 16)
9     (1)
The Police Act 1996 is amended as follows.
      (2)
In paragraph 11 of Schedule 2 (disqualification for being appointed as or
15
being member of a police authority), in sub-paragraph (1)(c), for “section
429(2)(b)” to the end substitute “section 429(2) of the Insolvency Act 1986
(disabilities on revocation of county court administration order); or”.
      (3)
In paragraph 7 of Schedule 2A (disqualification for being appointed as or
being member of the Metropolitan Police Authority), in sub-paragraph
20
(1)(c), for the words from “section 429(2)(b)” to the end substitute “section
429(2) of the Insolvency Act 1986 (disabilities on revocation of county court
administration order); or”.
Housing Act 1996 (c. 52)
10    (1)
Paragraph 4 of Schedule 1 to the Housing Act 1996 (power to remove
25
director, trustee etc. of registered social landlord) is amended as follows.
      (2)
In sub-paragraph (2)(c), for the words from “section 429(2)(b)” to the end
substitute “section 429(2) of the Insolvency Act 1986 (disabilities on
revocation of county court administration order);”.
Police Act 1997 (c. 50)
30
11    (1)
The Police Act 1997 is amended as follows.
      (2)
In section 91 (the Commissioners), in subsection (7)(b), for “section 429(2)(b)
of the Insolvency Act 1986 (failure to pay under county court administration
order)” substitute “section 429(2) of the Insolvency Act 1986 (disabilities on
revocation of county court administration order)”.
35
      (3)
In paragraph 3 of Schedule 2 (disqualification for being appointed as or
being member of a Service Authority), in sub-paragraph (1)(c), for the words
from “section 429(2)(b)” to the end substitute “section 429(2) of the
Insolvency Act 1986 (disabilities on revocation of county court
administration order); or”.
40

Tribunals, Courts and Enforcement Bill [HL]
Schedule 16 — Administration orders: consequential amendments
260

Criminal Justice and Police Act 2001 (c. 16)
12    (1)
Paragraph 3 of Schedule 3 to the Criminal Justice and Police Act 2001
(persons disqualified for being appointed as or being member of the Central
Police Training and Development Authority) is amended as follows.
      (2)
In sub-paragraph (1)(b), for the words from “section 429(2)(b)” to the end
5
substitute “section 429(2) of the Insolvency Act 1986 (c. 45) (disabilities on
revocation of county court administration order); or”.
Police Reform Act 2002 (c. 30)
13    (1)
Schedule 2 to the Police Reform Act 2002 (the Independent Police
Complaints Commission) is amended as follows.
10
      (2)
In paragraph 1(5) (grounds for removal of chairman), in paragraph (e)(ii),
for the words from “section 429(2)(b)” to the end substitute “section 429(2) of
the Insolvency Act 1986 (c. 45) (disabilities on revocation of county court
administration order);”.
      (3)
In paragraph 2(6) (grounds for removal of ordinary members), in paragraph
15
(e)(ii), for the words from “section 429(2)(b)” to the end substitute “section
429(2) of the Insolvency Act 1986 (c. 45) (disabilities on revocation of county
court administration order);”.
Railways and Transport Safety Act 2003 (c. 20)
14    (1)
Paragraph 7 of Schedule 4 to the Railways and Transport Safety Act 2003,
20
(eligibility for appointment as member of British Transport Police
Authority) is amended as follows.
      (2)
In sub-paragraph (3)(c), for “section 429(2)(b)” substitute “section 429(2)”.
Courts Act 2003 (c. 39)
15    (1)
Section 98 of the Courts Act 2003 (register of judgments and orders) is
25
amended as follows.
      (2)
In subsection ( 1)(b) (administration orders) for “section 112” substitute “Part
6”.

Tribunals, Courts and Enforcement Bill [HL]
Schedule 17 — Part 7A of the Insolvency Act 1986
261

Schedule 17
Section 103(1)

Part 7A of the Insolvency Act 1986
“Part 7A
Debt relief orders
Preliminary
5
251A
Debt relief orders
(1)
An individual who is unable to pay his debts may apply for an order
under this Part (“a debt relief order”) to be made in respect of his
qualifying debts.
(2)
In this Part “qualifying debt” means (subject to subsection (3)) a debt
10
which—
(a)
is for a liquidated sum payable either immediately or at some
certain future time; and
(b)
is not an excluded debt.
(3)
A debt is not a qualifying debt to the extent that it is secured.
15
(4)
In this Part “excluded debt” means a debt of any description
prescribed for the purposes of this subsection.
Applications for a debt relief order
251B
Making of application
(1)
An application for a debt relief order must be made to the official
20
receiver through an approved intermediary.
(2)
The application must include—
(a)
a list of the debts to which the debtor is subject at the date of
the application, specifying the amount of each debt
(including any interest, penalty or other sum that has become
25
payable in relation to that debt on or before that date) and the
creditor to whom it is owed;
(b)
details of any security held in respect of any of those debts;
and
(c)
such other information about the debtor’s affairs (including
30
his creditors, debts and liabilities and his income and assets)
as may be prescribed.
(3)
The rules may make further provision as to—
(a)
the form of an application for a debt relief order;
(b)
the manner in which an application is to be made; and
35
(c)
information and documents to be supplied in support of an
application.
(4)
For the purposes of this Part an application is not to be regarded as
having been made until—
(a)
the application has been submitted to the official receiver;
40
and

Tribunals, Courts and Enforcement Bill [HL]
Schedule 17 — Part 7A of the Insolvency Act 1986
262

(b)
any fee required in connection with the application by an
order under section 415 has been paid to such person as the
order may specify.
251C
Duty of official receiver to consider and determine application
(1)
This section applies where an application for a debt relief order is
5
made.
(2)
The official receiver may stay consideration of the application until
he has received answers to any queries raised with the debtor in
relation to anything connected with the application.
(3)
The official receiver must determine the application by—
10
(a)
deciding whether to refuse the application;
(b)
if he does not refuse it, by making a debt relief order in
relation to the specified debts he is satisfied were qualifying
debts of the debtor at the application date;

but he may only refuse the application if he is authorised or required
15
to do so by any of the following provisions of this section.
(4)
The official receiver may refuse the application if he considers that—
(a)
the application does not meet all the requirements imposed
by or under section 251B;
(b)
any queries raised with the debtor have not been answered to
20
the satisfaction of the official receiver within such time as he
may specify when they are raised;
(c)
the debtor has made any false representation or omission in
making the application or on supplying any information or
documents in support of it.
25
(5)
The official receiver must refuse the application if he is not satisfied
that—
(a)
the debtor is an individual who is unable to pay his debts;
(b)
at least one of the specified debts was a qualifying debt of the
debtor at the application date;
30
(c)
each of the conditions set out in Part 1 of Schedule 4ZA is met.
(6)
The official receiver may refuse the application if he is not satisfied
that each condition specified in Part 2 of Schedule 4ZA is met.
(7)
If the official receiver refuses an application he must give reasons for
his refusal to the debtor in the prescribed manner.
35
(8)
In this section “specified debt” means a debt specified in the
application.
251D
Presumptions applicable to the determination of an application
(1)
The following presumptions are to apply to the determination of an
application for a debt relief order.
40
(2)
The official receiver must presume that the debtor is an individual
who is unable to pay his debts at the determination date if—
(a)
that appears to the official receiver to be the case at the
application date from the information supplied in the

Tribunals, Courts and Enforcement Bill [HL]
Schedule 17 — Part 7A of the Insolvency Act 1986
263

application and he has no reason to believe that the
information supplied is incomplete or inaccurate; and
(b)
he has no reason to believe that, by virtue of a change in the
debtor’s financial circumstances since the application date,
the debtor may be able to pay his debts.
5
(3)
The official receiver must presume that a specified debt (of the
amount specified in the application and owed to the creditor so
specified) is a qualifying debt at the application date if—
(a)
that appears to him to be the case from the information
supplied in the application; and
10
(b)
he has no reason to believe that the information supplied is
incomplete or inaccurate.
(4)
The official receiver must presume that the condition specified in
paragraph 1 of Schedule 4ZA is met if—
(a)
that appears to him to be the case from the information
15
supplied in the application;
(b)
any prescribed verification checks relating to the condition
have been made; and
(c)
he has no reason to believe that the information supplied is
incomplete or inaccurate.
20
(5)
The official receiver must presume that any other condition specified
in Part 1 or 2 of Schedule 4ZA is met if—
(a)
that appears to him to have been the case as at the application
date from the information supplied in the application and he
has no reason to believe that the information supplied is
25
incomplete or inaccurate;
(b)
any prescribed verification checks relating to the condition
have been made; and
(c)
he has no reason to believe that, by virtue of a change in
circumstances since the application date, the condition may
30
no longer be met.
(6)
References in this section to information supplied in the application
include information supplied to the official receiver in support of the
application.
(7)
In this section “specified debt” means a debt specified in the
35
application.
Making and effect of debt relief order
251E
Making of debt relief orders
(1)
This section applies where the official receiver makes a debt relief
order on determining an application under section 251C.
40
(2)
The order must be made in the prescribed form.
(3)
The order must include a list of the debts which the official receiver
is satisfied were qualifying debts of the debtor at the application
date, specifying the amount of the debt at that time and the creditor
to whom it was then owed.
45

Tribunals, Courts and Enforcement Bill [HL]
Schedule 17 — Part 7A of the Insolvency Act 1986
264

(4)
The official receiver must—
(a)
give a copy of the order to the debtor; and
(b)
make an entry for the order in the register containing the
prescribed information about the order or the debtor.
(5)
The rules may make provision as to other steps to be taken by the
5
official receiver or the debtor on the making of the order.
(6)
Those steps may include in particular notifying each creditor to
whom a qualifying debt specified in the order is owed of—
(a)
the making of the order and its effect,
(b)
the grounds on which a creditor may object under section
10
251K, and
(c)
any other prescribed information.
(7)
In this Part the date on which an entry relating to the making of a
debt relief order is first made in the register is referred to as “the
effective date”.
15
251F
Effect of debt relief order on other debt management arrangements
(1)
This section applies if—
(a)
a debt relief order is made, and
(b)
immediately before the order is made, other debt
management arrangements are in force in respect of the
20
debtor.
(2)
The other debt management arrangements cease to be in force when
the debt relief order is made.
(3)
In this section “other debt management arrangements” means—
(a)
an administration order under Part 6 of the County Courts
25
Act 1984;
(b)
an enforcement restriction order under Part 6A of that Act;
(c)
a debt repayment plan arranged in accordance with a debt
management scheme that is approved under Chapter 4 of
Part 5 of the Tribunals, Courts and Enforcement Act 2007.
30
251G
Moratorium from qualifying debts
(1)
A moratorium commences on the effective date for a debt relief order
in relation to each qualifying debt specified in the order (“a specified
qualifying debt”).
(2)
During the moratorium, the creditor to whom a specified qualifying
35
debt is owed—
(a)
has no remedy in respect of the debt, and
(b)
may not—
(i)
commence a creditor’s petition in respect of the debt,
or
40
(ii)
otherwise commence any action or other legal
proceedings against the debtor for the debt,

except with the permission of the court and on such terms as
the court may impose.