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Tribunals, Courts and Enforcement Bill [HL]


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

272

 

(3)   

A person is not guilty of an offence under this section if he proves

that, in respect of the conduct constituting the offence, he had no

intent to defraud or to conceal the state of his affairs.

(4)   

In its application to a trading record subsection (2)(a) has effect as if

the reference to 12 months were a reference to two years.

5

(5)   

In subsection (4) “trading record” means a book, document or record

which shows or explains the transactions or financial position of a

person’s business, including—

(a)   

a periodic record of cash paid and received,

(b)   

a statement of periodic stock-taking, and

10

(c)   

except in the case of goods sold by way of retail trade, a

record of goods sold and purchased which identifies the

buyer and seller or enables them to be identified.

(6)   

It is immaterial for the purposes of an offence under this section

whether or not the debt relief order in question is revoked after the

15

conduct constituting the offence takes place (but no offence is

committed under this section by virtue of conduct occurring after the

order is revoked).

251Q    

Fraudulent disposal of property

(1)   

A person in respect of whom a debt relief order is made is guilty of

20

an offence if he made or caused to be made any gift or transfer of his

property during the period between—

(a)   

the start of the period of two years ending with the

application date; and

(b)   

the end of the moratorium period.

25

(2)   

The reference in subsection (1) to making a transfer of any property

includes causing or conniving at the levying of any execution against

that property.

(3)   

A person is not guilty of an offence under this section if he proves

that, in respect of the conduct constituting the offence, he had no

30

intent to defraud or to conceal the state of his affairs.

(4)   

For the purposes of subsection (3) a person is to be taken to have

proved that he had no such intent if—

(a)   

sufficient evidence is adduced to raise an issue as to whether

he had such intent; and

35

(b)   

the contrary is not proved beyond reasonable doubt.

(5)   

It is immaterial for the purposes of this section whether or not the

debt relief order in question is revoked after the conduct constituting

an offence takes place (but no offence is committed by virtue of

conduct occurring after the order is revoked).

40

251R    

Fraudulent dealing with property obtained on credit

(1)   

A person in respect of whom a debt relief order is made is guilty of

an offence if during the relevant period he disposed of any property

which he had obtained on credit and, at the time he disposed of it,

had not paid for it.

45

 

 

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

273

 

(2)   

Any other person is guilty of an offence if during the relevant period

he acquired or received property from a person in respect of whom

a debt relief order was made (the “debtor”) knowing or believing—

(a)   

that the debtor owed money in respect of the property, and

(b)   

that the debtor did not intend, or was unlikely to be able, to

5

pay the money he so owed.

(3)   

In subsections (1) and (2) “relevant period” means the period

between—

(a)   

the start of the period of two years ending with the

application date; and

10

(b)   

the determination date.

(4)   

A person is not guilty of an offence under subsection (1) or (2) if the

disposal, acquisition or receipt of the property was in the ordinary

course of a business carried on by the debtor at the time of the

disposal, acquisition or receipt.

15

(5)   

In determining for the purposes of subsection (4) whether any

property is disposed of, acquired or received in the ordinary course

of a business carried on by the debtor, regard may be had, in

particular, to the price paid for the property.

(6)   

A person is not guilty of an offence under subsection (1) if he proves

20

that, in respect of the conduct constituting the offence, he had no

intent to defraud or to conceal the state of his affairs.

(7)   

In this section references to disposing of property include pawning

or pledging it; and references to acquiring or receiving property shall

be read accordingly.

25

(8)   

It is immaterial for the purposes of this section whether or not the

debt relief order in question is revoked after the conduct constituting

an offence takes place (but no offence is committed by virtue of

conduct occurring after the order is revoked).

251S    

Obtaining credit or engaging in business

30

(1)   

A person in respect of whom a debt relief order is made is guilty of

an offence if, during the relevant period—

(a)   

he obtains credit (either alone or jointly with any other

person) without giving the person from whom he obtains the

credit the relevant information about his status; or

35

(b)   

he engages directly or indirectly in any business under a

name other than that in which the order was made without

disclosing to all persons with whom he enters into any

business transaction the name in which the order was made.

(2)   

For the purposes of subsection (1)(a) the relevant information about

40

a person’s status is the information that—

(a)   

a moratorium is in force in relation to the debt relief order,

(b)   

a debt relief restrictions order is in force in respect of him, or

(c)   

both a moratorium and a debt relief restrictions order is in

force,

45

   

as the case may be.

(3)   

In subsection (1) “relevant period” means—

 

 

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

274

 

(a)   

the moratorium period relating to the debt relief order, or

(b)   

the period for which a debt relief restrictions order is in force

in respect of the person in respect of whom the debt relief

order is made,

   

as the case may be.

5

(4)   

Subsection (1)(a) does not apply if the amount of the credit is less

than the prescribed amount (if any).

(5)   

The reference in subsection (1)(a) to a person obtaining credit

includes the following cases—

(a)   

where goods are bailed to him under a hire-purchase

10

agreement, or agreed to be sold to him under a conditional

sale agreement;

(b)   

where he is paid in advance (in money or otherwise) for the

supply of goods or services.

251T    

Offences: supplementary

15

(1)   

Proceedings for an offence under this Part may only be instituted by

the Secretary of State or by or with the consent of the Director of

Public Prosecutions.

(2)   

It is not a defence in proceedings for an offence under this Part that

anything relied on, in whole or in part, as constituting the offence

20

was done outside England and Wales.

(3)   

A person guilty of an offence under this Part is liable to

imprisonment or a fine, or both (but see section 430).

Supplementary

251U    

Approved intermediaries

25

(1)   

In this Part “approved intermediary” means an individual for the

time being approved by a competent authority to act as an

intermediary between a person wishing to make an application for a

debt relief order and the official receiver.

(2)   

In this section “competent authority” means a person or body for the

30

time being designated by the Secretary of State for the purposes of

granting approvals under this section.

(3)   

Designation as a competent authority may be limited so as to permit

the authority only to approve persons of a particular description.

(4)   

The Secretary of State may by regulations make provision as to—

35

(a)   

the procedure for designating persons or bodies as

competent authorities;

(b)   

descriptions of individuals who are ineligible to be approved

under this section;

(c)   

the procedure for granting approvals under this section;

40

(d)   

the withdrawal of designations or approvals under this

section;

   

and provision made under paragraph (a) or (c) may include

provision requiring the payment of fees.

 

 

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

275

 

(5)   

The rules may make provision about the activities to be carried out

by an approved intermediary in connection with an application for a

debt relief order, which may in particular include—

(a)   

assisting the debtor in making the application;

(b)   

checking that the application has been properly completed;

5

(c)   

sending the application to the official receiver.

(6)   

The rules may also make provision about other activities to be

carried out by approved intermediaries.

(7)   

An approved intermediary may not charge a debtor any fee in

connection with an application for a debt relief order.

10

(8)   

An approved intermediary is not liable to any person in damages for

anything done or omitted to be done when acting (or purporting to

act) as an approved intermediary in connection with a particular

application by a debtor for a debt relief order.

(9)   

Subsection (8) does not apply if the act or omission was in bad faith.

15

(10)   

Regulations under subsection (4) shall be made by statutory

instrument subject to annulment in pursuance of a resolution of

either House of Parliament.

251V    

Debt relief restrictions orders and undertakings

Schedule 4ZB (which makes provision about debt relief restrictions

20

orders and debt relief restrictions undertakings) has effect.

251W    

Register of debt relief orders etc

The Secretary of State must maintain a register of matters relating to—

(a)   

debt relief orders;

(b)   

debt relief restrictions orders; and

25

(c)   

debt relief restrictions undertakings.

251X    

Interpretation

(1)   

In this Part—

“the application date”, in relation to a debt relief order or an

application for a debt relief order, means the date on which

30

the application for the order is made to the official receiver;

“approved intermediary” has the meaning given in section

251U(1);

“debt relief order” means an order made by the official receiver

under this Part;

35

“debtor” means—

(a)   

in relation to an application for a debt relief order, the

applicant; and

(b)   

in relation to a debt relief order, the person in relation

to whom the order is made;

40

“debt relief restrictions order” and “debt relief restrictions

undertaking” means an order made, or an undertaking

accepted, under Schedule 4ZB;

“the determination date”, in relation to a debt relief order or an

application for a debt relief order, means the date on which

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Tribunals, Courts and Enforcement Bill [HL]
Schedule 18 — Schedule 4ZA to the Insolvency Act 1986

276

 

the application for the order is determined by the official

receiver;

“the effective date” has the meaning given in section 251E(7);

“excluded debt” is to be construed in accordance with section

251A;

5

“moratorium” and “moratorium period” are to be construed in

accordance with sections 251G and 251H;

“qualifying debt”, in relation to a debtor, has the meaning given

in section 251A(2);

“the register” means the register maintained under section

10

251W;

“specified qualifying debt” has the meaning given in section

251G(1).

(2)   

In this Part references to a creditor specified in a debt relief order as

the person to whom a qualifying debt is owed by the debtor include

15

a reference to any person to whom the right to claim the whole or any

part of the debt has passed, by assignment or operation of law, after

the date of the application for the order.”

Schedule 18

Section 103(2)

 

Schedule 4ZA to the Insolvency Act 1986

20

“Schedule 4ZA

conditions for making a debt relief order

Part 1

Conditions which must be met

Connection with England and Wales

25

1     (1)  

The debtor—

(a)   

is domiciled in England and Wales on the application date;

or

(b)   

at any time during the period of three years ending with

that date—

30

(i)   

was ordinarily resident, or had a place of residence,

in England and Wales; or

(ii)   

carried on business in England and Wales.

      (2)  

The reference in sub-paragraph (1)(b)(ii) to the debtor carrying on

business includes—

35

(a)   

the carrying on of business by a firm or partnership of

which he is a member;

(b)   

the carrying on of business by an agent or manager for him

or for such a firm or partnership.

 

 

Tribunals, Courts and Enforcement Bill [HL]
Schedule 18 — Schedule 4ZA to the Insolvency Act 1986

277

 

Debtor’s previous insolvency history

2          

The debtor is not, on the determination date—

(a)   

an undischarged bankrupt;

(b)   

subject to an interim order or voluntary arrangement

under Part 8; or

5

(c)   

subject to a bankruptcy restrictions order or a debt relief

restrictions order.

3          

A debtor’s petition for the debtor’s bankruptcy under Part 9—

(a)   

has not been presented by the debtor before the

determination date;

10

(b)   

has been so presented, but proceedings on the petition

have been finally disposed of before that date; or

(c)   

has been so presented and proceedings in relation to the

petition remain before the court at that date, but the court

has referred the debtor under section 274A(2) for the

15

purposes of making an application for a debt relief order.

4          

A creditor’s petition for the debtor’s bankruptcy under Part 9—

(a)   

has not been presented against the debtor at any time

before the determination date;

(b)   

has been so presented, but proceedings on the petition

20

have been finally disposed of before that date; or

(c)   

has been so presented and proceedings in relation to the

petition remain before the court at that date, but the person

who presented the petition has consented to the making of

an application for a debt relief order.

25

5          

A debt relief order has not been made in relation to the debtor in

the period of six years ending with the determination date.

Limit on debtor’s overall indebtedness

6     (1)  

The total amount of the debtor’s debts on the determination date,

other than unliquidated debts and excluded debts, does not

30

exceed the prescribed amount.

      (2)  

For this purpose an unliquidated debt is a debt that is not for a

liquidated sum payable to a creditor either immediately or at some

future certain time.

Limit on debtor’s monthly surplus income

35

7     (1)  

The debtor’s monthly surplus income (if any) on the

determination date does not exceed the prescribed amount.

      (2)  

For this purpose “monthly surplus income” is the amount by

which a person’s monthly income exceeds the amount necessary

for the reasonable domestic needs of himself and his family.

40

      (3)  

The rules may—

(a)   

make provision as to how the debtor’s monthly surplus

income is to be determined;

 

 

Tribunals, Courts and Enforcement Bill [HL]
Schedule 18 — Schedule 4ZA to the Insolvency Act 1986

278

 

(b)   

provide that particular descriptions of income are to be

excluded for the purposes of this paragraph.

Limit on value of debtor’s property

8     (1)  

The total value of the debtor’s property on the determination date

does not exceed the prescribed amount.

5

      (2)  

The rules may—

(a)   

make provision as to how the value of a person’s property

is to be determined;

(b)   

provide that particular descriptions of property are to be

excluded for the purposes of this paragraph.

10

Part 2

Other conditions

9     (1)  

The debtor has not entered into a transaction with any person at

an undervalue during the period between—

(a)   

the start of the period of two years ending with the

15

application date; and

(b)   

the determination date.

      (2)  

For this purpose a debtor enters into a transaction with a person at

an undervalue if—

(a)   

he makes a gift to that person or he otherwise enters into a

20

transaction with that person on terms that provide for him

to receive no consideration;

(b)   

he enters into a transaction with that person in

consideration of marriage or the formation of a civil

partnership; or

25

(c)   

he enters into a transaction with that person for a

consideration the value of which, in money or money’s

worth, is significantly less than the value, in money or

money’s worth, of the consideration provided by the

individual.

30

10    (1)  

The debtor has not given a preference to any person during the

period between—

(a)   

the start of the period of two years ending with the

application date; and

(b)   

the determination date.

35

      (2)  

For this purpose a debtor gives a preference to a person if—

(a)   

that person is one of the debtor’s creditors to whom a

qualifying debt is owed or is a surety or guarantor for any

such debt, and

(b)   

the debtor does anything or suffers anything to be done

40

which (in either case) has the effect of putting that person

into a position which, in the event that a debt relief order is

made in relation to the debtor, will be better than the

position he would have been in if that thing had not been

done.”

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