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 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.
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(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).
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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.
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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
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(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;
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“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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