Brendan Burgess
Founder
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The main recommendations in the Report are:These are the key points, as I see them, extracted from their longer press release
New process: Debt Settlement Arrangement
A Personal Insolvency Trustee would manage a Debt Settlement Arrangement, which would be for debtors who “can pay” at least some of their debt. In a Debt Settlement Arrangement, creditors and a debtor would make a legally binding commitment in which the debtor would repay an agreed amount of personal debt to creditors over a period of up to 5 years. At the end of this, the debt would be deemed to be repaid in full. The Debt Settlement Arrangement process would only be available to a person who acts in good faith and makes full disclosure of all their assets; if they do not, the process will automatically end and the debtor could be prosecuted. If the debtor complies with the Debt Settlement Agreement, at the end of it he or she would be able to make a “fresh start” without having any damage to their personal credit rating.
New process: Debt Relief Order
For debtors whose circumstances are so bad that they have virtually no prospect of paying back any debt (the “can’t pay” debtor or “no assets, no income” situation), the Debt Enforcement Office, with the assistance of the Money Advice and Budgeting Service (MABS), could make a Debt Relief Order. This would be a once-off Order, and would simply recognise the reality of an indebtedness that cannot be repaid within a foreseeable time period. Unless circumstances changed dramatically for the debtor, the effect of this Order is also that the debt is deemed to be discharged.
A Debt Enforcement Office to replace the court system and new debt enforcement mechanisms
The Debt Enforcement Office would have to ensure that any debt enforcement mechanism is proportionate .
The Debt Enforcement Office would be able to use a wide variety of enforcement mechanisms. These include: instalment orders, attachment of debts orders; attachment of earnings orders; and goods seizure orders. These can also be used in combination with each other, where appropriate.
Automatic discharge from bankruptcy after 3 years, subject to (a) leaving the bankrupt’s full estate (including any house) in the bankruptcy; and (b) allowing the High Court’s Official Assignee in Bankruptcy to order the bankrupt make repayments for up to 5 years;
New process: Debt Settlement Arrangement
A Personal Insolvency Trustee would manage a Debt Settlement Arrangement, which would be for debtors who “can pay” at least some of their debt. In a Debt Settlement Arrangement, creditors and a debtor would make a legally binding commitment in which the debtor would repay an agreed amount of personal debt to creditors over a period of up to 5 years. At the end of this, the debt would be deemed to be repaid in full. The Debt Settlement Arrangement process would only be available to a person who acts in good faith and makes full disclosure of all their assets; if they do not, the process will automatically end and the debtor could be prosecuted. If the debtor complies with the Debt Settlement Agreement, at the end of it he or she would be able to make a “fresh start” without having any damage to their personal credit rating.
New process: Debt Relief Order
For debtors whose circumstances are so bad that they have virtually no prospect of paying back any debt (the “can’t pay” debtor or “no assets, no income” situation), the Debt Enforcement Office, with the assistance of the Money Advice and Budgeting Service (MABS), could make a Debt Relief Order. This would be a once-off Order, and would simply recognise the reality of an indebtedness that cannot be repaid within a foreseeable time period. Unless circumstances changed dramatically for the debtor, the effect of this Order is also that the debt is deemed to be discharged.
A Debt Enforcement Office to replace the court system and new debt enforcement mechanisms
The Debt Enforcement Office would have to ensure that any debt enforcement mechanism is proportionate .
The Debt Enforcement Office would be able to use a wide variety of enforcement mechanisms. These include: instalment orders, attachment of debts orders; attachment of earnings orders; and goods seizure orders. These can also be used in combination with each other, where appropriate.
Automatic discharge from bankruptcy after 3 years, subject to (a) leaving the bankrupt’s full estate (including any house) in the bankruptcy; and (b) allowing the High Court’s Official Assignee in Bankruptcy to order the bankrupt make repayments for up to 5 years;