Tribunals, Courts and Enforcement Bill [HL]

House of Commons

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

Tribunals, Courts and Enforcement Bill [HL]
Part 5 — Debt management and relief
Chapter 2 — Enforcement restriction orders
83

(b)
the consideration (if any) he expects will be given for the
disposal;
(c)
such other matters as may be prescribed;
(d)
such other matters as the court may specify.
(5)
But subsection (4) does not apply if the disposal is of—
5
(a)
goods that are exempt goods for the purposes of Schedule 12 to
the Tribunals, Courts and Enforcement Act 2006,
(b)
goods that are protected under any other enactment from being
taken control of under that Schedule, or
(c)
prescribed property.
10
(6)
The duty under subsection (4) to provide the proper county court with
particulars of a proposed disposal of property applies whether the
debtor is the sole owner, or one of several owners, of the property.
(7)
In any provision of this section “prescribed” means prescribed in
regulations for the purposes of that provision.
15
117K
Offence if information not provided
(1)
A person commits an offence if he fails to comply with—
(a)
section 117J(2) and (3), or
(b)
section 117J(4).
(2)
A person who commits an offence under subsection (1) may be ordered
20
by a judge of the proper county court to pay a fine of not more than £250
or to be imprisoned for not more than 14 days.
(3)
Where under subsection (2) a person is ordered to be imprisoned by a
judge of the proper county court, the judge may at any time—
(a)
revoke the order, and
25
(b)
if the person is already in custody, order his discharge.
(4)
Section 129 of the County Courts Act 1984 (c. 28) (enforcement of fines)
applies to payment of a fine imposed under subsection (2).
(5)
For the purposes of section 13 of the Administration of Justice Act 1960
(c. 65) (appeal in cases of contempt of court), subsection (2) is to be
30
treated as an enactment enabling a county court to deal with an offence
under subsection (1) as if it were a contempt of court.
(6)
A district judge or deputy district judge shall have the same powers
under this section as a judge of a county court.
117L
Existing county court proceedings to be stayed
35
(1)
This section applies if these conditions are met—
(a)
an enforcement restriction order is made;
(b)
proceedings in a county court (other than bankruptcy
proceedings) are pending against the debtor in respect of a
qualifying debt;
40
(c)
by virtue of a requirement included in the order by virtue of
section 117D, the creditor under the qualifying debt is not
entitled to continue the proceedings in respect of the debt;
(d)
the county court receives notice of the enforcement restriction
order.
45

Tribunals, Courts and Enforcement Bill [HL]
Part 5 — Debt management and relief
Chapter 2 — Enforcement restriction orders
84

(2)
The county court must stay the proceedings.
(3)
The county court—
(a)
may allow costs already incurred by the creditor, and
(b)
if the court allows such costs, may on application or of its own
motion add them to the debt owed to the creditor.
5
117M
Charges
(1)
This section applies during, and after, the currency of an enforcement
restriction order.
(2)
A qualifying creditor may not make any charge in respect of a protected
qualifying debt, unless the charge—
10
(a)
is interest, or
(b)
is not interest but relates to a time before or after the currency of
the order.
(3)
A charge made in breach of subsection (2) is not recoverable.
(4)
In subsection (2) “protected qualifying debt” means any qualifying debt
15
under which the debtor was a debtor at some time during the currency
of the enforcement restriction order.
Variation of duration
117N
Variation of duration
(1)
The proper county court may vary an enforcement restriction order so
20
as to specify a day, or (if a day has already been specified under section
117H or this section) a different day, on which the order will cease to
have effect.
(2)
But the new termination day must fall on or before the last day of the
maximum permitted period.
25
(3)
If the proper county court varies an enforcement restriction order
under subsection (1), the order ceases to have effect on the new
termination day.
(4)
The power under this section is exercisable—
(a)
on the application of the debtor;
30
(b)
on the application of a qualifying creditor;
(c)
of the court’s own motion.
(5)
In this section—
(a)
“new termination day” means the day on which the order will
cease to have effect in accordance with the variation under
35
subsection (1);
(b)
“maximum permitted period” means the period of 12 months
beginning with the day on which the order was originally
made.
(6)
This section is subject to section 112W (effect of revocation).
40

Tribunals, Courts and Enforcement Bill [HL]
Part 5 — Debt management and relief
Chapter 2 — Enforcement restriction orders
85

Revocation of order
117O
Duty to revoke order
(1)
The proper county court must revoke an enforcement restriction order
in either of these cases—
(a)
where it becomes apparent that, at the time the order was made,
5
the condition in subsection 117B(2) was not met (debtor in fact
did not have two or more qualifying debts);
(b)
where the debtor is no longer a debtor under any qualifying
debts.
(2)
The proper county court must revoke an enforcement restriction order
10
in either of these cases—
(a)
where it becomes apparent that, at the time the order was made,
the condition in subsection 117B(3) was not met (debtor in fact
had business debt), and he is still a debtor under the business
debt, or any of the business debts, in question;
15
(b)
where the debtor subsequently becomes a debtor under a
business debt, and he is still a debtor under that debt.
(3)
The proper county court must revoke an enforcement restriction order
where it becomes apparent that, at the time the order was made, the
condition in section 117B(4) was not met (debtor in fact excluded under
20
ERO, voluntary arrangement or bankruptcy exclusion).
(4)
The proper county court must revoke an enforcement restriction order
where, after the order is made—
(a)
the debtor becomes excluded under the voluntary arrangement
exclusion, or
25
(b)
a bankruptcy order is made against the debtor, and is still in
force.
(5)
The proper county court must revoke an enforcement restriction order
in either of these cases—
(a)
where it becomes apparent that, at the time the order was made,
30
the condition in section 117B(5) was not met (debtor in fact able
to pay qualifying debts);
(b)
where the debtor is now able to pay all of his qualifying debts.
(6)
The proper county court must revoke an enforcement restriction order
in either of these cases—
35
(a)
where it becomes apparent that, at the time the order was made,
the condition in section 117B(6) was not met (debtor in fact not
suffering from sudden and unforeseen deterioration in financial
circumstances);
(b)
where the debtor is no longer suffering from the deterioration
40
in financial circumstances which was taken into account for the
purposes of section 117B(6) (even if he is suffering from some
other sudden and unforeseen deterioration in his financial
circumstances).
(7)
The proper county court must revoke an enforcement restriction order
45
in either of these cases—

Tribunals, Courts and Enforcement Bill [HL]
Part 5 — Debt management and relief
Chapter 2 — Enforcement restriction orders
86

(a)
where it becomes apparent that, at the time the order was made,
the condition in section 117B(7) was not met (in fact no realistic
prospect of improvement in debtor’s financial circumstances);
(b)
where there is no longer a realistic prospect that the debtor’s
financial circumstances will improve during the period within
5
which the order would continue to have effect (if not revoked).
(8)
The proper county court must revoke an enforcement restriction order
in either of these cases—
(a)
where it becomes apparent that, at the time the order was made,
the condition in section 117B(8) was not met (not in fact fair and
10
equitable to make order);
(b)
where it is not fair and equitable for the order to continue to
have effect.
117P
Power to revoke order
(1)
The proper county court may revoke an enforcement restriction order
15
in any case where there is no duty under this Part to revoke it.
(2)
The power of revocation under this section may, in particular, be
exercised in any of the following cases—
(a)
where the order includes, or has previously included, a
repayment requirement, and the debtor has failed to comply
20
with that requirement;
(b)
where the debtor has failed to provide the proper county court
with the particulars required by—
(i)
section 117J(2) and (3), or
(ii)
section 117J(4).
25
(3)
The power of revocation under this section is exercisable—
(a)
on the application of the debtor;
(b)
on the application of a qualifying creditor;
(c)
of the court’s own motion.
117Q
Effect of revocation
30
(1)
This section applies if, under any duty or power in this Part, the proper
county court revokes an enforcement restriction order.
(2)
The order ceases to have effect in accordance with the terms of the
revocation.
Notification of certain events
35
117R
Notice when order made, varied, revoked etc
(1)
If a notifiable event occurs in relation to an enforcement restriction
order, the proper county court must give notice of the event to every
identified qualifying creditor of the debtor.
(2)
There is a notifiable event in any of the following cases—
40
(a)
when the enforcement restriction order is made;
(b)
when the enforcement restriction order is varied;
(c)
when the enforcement restriction order is revoked;

Tribunals, Courts and Enforcement Bill [HL]
Part 5 — Debt management and relief
Chapter 2 — Enforcement restriction orders
87

(d)
when the proper county court is given notice under any of the
provisions listed in section 117H(7) (effect of administration
order or debt repayment plan on enforcement restriction order).
(3)
A person is an identified qualifying creditor of the debtor if—
(a)
the debtor has notified the proper county court, or another court
5
whilst it was previously the proper county court, that the
person is a qualifying creditor, or
(b)
the proper county court is satisfied that the person is a
qualifying creditor.
Interpretation
10
117S
Introduction
Sections 117T to 117W apply for the purposes of this Part.
117T
Main definitions
(1)
In this Part—
“enforcement restriction order” has the meaning given by section
15
117A;
“debtor” has the meaning given by section 117B;
“qualifying creditor” means a creditor under a qualifying debt.
(2)
References to the currency of an enforcement restriction order are
references to the period which—
20
(a)
begins when the order first has effect, and
(b)
ends when the order ceases to have effect.
(3)
In relation to an enforcement restriction order, references to the proper
county court are references to the county court that made the order.
(4)
But that is subject to rules of court as to the venue for, and transfer of,
25
proceedings in county courts.
117U
Expressions relating to debts
(1)
All debts are qualifying debts, except for the following—
(a)
any debt secured against an asset;
(b)
any debt of a description specified in regulations.
30
(2)
A business debt is any debt (whether or not a qualifying debt) which is
incurred by a person in the course of a business.
(3)
Only debts that have already arisen are included in references to debts;
and accordingly such references do not include any debt that will arise
only on the happening of some future contingency.
35
117V
  Inability to pay debts
(1)
In a case where an individual is the debtor under a debt that is
repayable by a single payment, the debtor is to be regarded as unable
to pay the debt only if—
(a)
the time for making the payment has been reached;
40
(b)
the debtor has failed to make the single payment; and
(c)
the debtor is unable to make that payment.

Tribunals, Courts and Enforcement Bill [HL]
Part 5 — Debt management and relief
Chapter 2 — Enforcement restriction orders
88

(2)
In a case where an individual is the debtor under a debt that is
repayable by a number of payments, the debtor is to be regarded as
unable to pay the debt only if—
(a)
the time for making the first of the payments has been reached;
(b)
the debtor has failed to make one or more of the payments; and
5
(c)
the debtor is unable to make all of the missed payments.
117W
  The ERO, voluntary arrangement and bankruptcy exclusions
(1)
The debtor is excluded under the ERO exclusion if—
(a)
an enforcement restriction order currently has effect in respect
of him, or
10
(b)
an enforcement restriction order has previously had effect in
respect of him, and the period of 12 months — beginning with
the day when that order ceased to have effect — has yet to
finish.
(2)
But in a case that falls within subsection (1)(b), the debtor is not
15
excluded under the ERO exclusion if the previous enforcement
restriction order—
(a)
ceased to have effect in accordance with any of the provisions
listed in section 117H(7) (effect of administration order or debt
repayment plan on enforcement restriction order), or
20
(b)
was revoked in accordance with section 117O(1)(b) (debtor no
longer has any qualifying debts).
(3)
The debtor is excluded under the voluntary arrangement exclusion if—
(a)
an interim order under section 252 of the Insolvency Act 1986
has effect in respect of him (interim order where debtor intends
25
to make proposal for voluntary arrangement), or
(b)
he is bound by a voluntary arrangement approved under Part 8
of the Insolvency Act 1986.
(4)
The debtor is excluded under the bankruptcy exclusion if—
(a)
a petition for a bankruptcy order to be made against him has
30
been presented but not decided, or
(b)
he is an undischarged bankrupt.
Regulations
117X
  Power to make regulations
(1)
It is for the Lord Chancellor to make regulations under this Part.
35
(2)
Any power to make regulations under this Part is exercisable by
statutory instrument.
(3)
A statutory instrument containing regulations under this Part is subject
to annulment in pursuance of a resolution of either House of
Parliament.”
40
(2)
In Schedule 6A to the Magistrates’ Courts Act 1980 (c. 43) (fines that may be
altered under section 143 of the 1980 Act) insert the following entry at the
appropriate place in the entries relating to the County Courts Act 1984 (c. 28)—

Tribunals, Courts and Enforcement Bill [HL]
Part 5 — Debt management and relief
Chapter 4 — Debt management schemes
89

“Section 117K(1) (enforcement

£250”

restriction orders: failure to provide

information)

(3)
In section 98 of the Courts Act 2003 (c. 39) (register of judgments and orders
etc.), in subsection (1), for paragraph (d) substitute—
5
“(d)
enforcement restriction orders under Part 6A of that Act (power
of county courts to make enforcement restriction orders);”.
Chapter 3
Debt relief orders
103
Debt relief orders and debt relief restrictions orders etc
10
(1)
In the Second Group of Parts of the Insolvency Act 1986 (c. 45) (insolvency of
individuals), before Part 8 there is inserted, as Part 7A, the Part set out in
Schedule 17.
(2)
After Schedule 4 to that Act there is inserted, as Schedules 4ZA and 4ZB, the
Schedules set out in Schedules 18 and 19.
15
(3)
Schedule 20 (which makes amendments consequential on provisions
contained in Schedule 17) has effect.
Chapter 4
Debt management schemes
Introductory
20
104
Debt management schemes
(1)
A debt management scheme is a scheme that meets the conditions in this
section.
(2)
The scheme must be open to some or all non-business debtors.
(3)
A scheme is open to a non-business debtor if it allows him to make a request to
25
the scheme operator for a debt repayment plan to be arranged for him.
(4)
The scheme must provide that, if such a request is made—
(a)
a decision must be made about whether a debt repayment plan is to be
arranged for the non-business debtor, and
(b)
such a plan must be arranged (if that is the decision made).
30
(5)
The scheme must be operated by a body of persons (whether a body corporate
or not).
105
Debt repayment plans
(1)
A debt repayment plan is a plan that meets the conditions in this section.