Debt Remission
(Individuals) (Jersey) Law 2016
A LAW to provide for debt remission
for individuals who are unable to pay their debts.
Adopted by the
States 2nd February 2016
Sanctioned by
Order of Her Majesty in Council 15th March 2016
Registered by the
Royal Court 1st
April 2016
THE STATES, subject to the sanction of Her Most Excellent Majesty in Council, have
adopted the following Law –
PART 1
INTERPRETATION
1 Interpretation
In this Law –
“approved intermediary”
means a person approved as an intermediary under Article 5(1);
“debt remission order”
means a debt remission order granted under Article 6(5)(b);
“excluded debt”
means a debt specified as such in an Order made under Article 2;
“Minister” means the
Chief Minister;
“moratorium period”
means the period referred to in Article 10(1);
“obtaining credit”
includes obtaining goods under a hire purchase agreement within the meaning of
the Supply of Goods and Services (Jersey) Law 2009[1];
“qualifying debt”
means a debt that –
(a) is
for a liquidated sum payable either immediately or at some certain future time;
and
(b) is
not an excluded debt,
but a debt is not a qualifying debt to the extent that it is secured;
“prescribed” means
prescribed by Order made by the Minister;
“Register” means the
Debt Remission Register established under Article 7;
“working day” means
a weekday (within the meaning of Part 1 of the Schedule to the Public
Holidays and Bank Holidays (Jersey) Act 2010[2]) other than –
(a) a day specified in that
Schedule as a day which is to be observed as a public holiday; or
(b) a
day noted in that Schedule as a day which is by custom observed as a general
holiday.
PART 2
Debt Remission
2 Excluded
debt
The Minister may by Order specify that a debt is an excluded debt
for the purposes of this Law.
3 Application
for debt remission order
(1) Subject
to paragraphs (2) and (3) and Articles 4 and 5, an individual who is
a debtor and who is unable to pay his or her debts may apply to the Viscount
for a debt remission order to be granted in respect of his or her qualifying
debts.
(2) An
application for a debt remission order must be made in the form approved by the
Viscount and must include –
(a) a
list of all debts to which the debtor is subject at the date of the application
specifying –
(i) the amount of
each debt including any interest, penalty or other sum that has become payable
in relation to that debt on or before that date, and
(ii) the creditor to
whom it is owed;
(b) details
of security held in respect of any of those debts; and
(c) such
other information about the debtor’s affairs (including his or her
creditors, debts, liabilities, income and assets) as may be prescribed.
(3) An
application shall not be regarded as being made until –
(a) the
application has been submitted to the Viscount;
(b) any
fee payable to the Viscount in respect of the application has been paid; and
(c) any
prescribed fee payable to an approved intermediary has been paid.
4 Eligibility
(1) A
debtor shall not be eligible for a debt remission order unless –
(a) the debtor is at least 18 years
of age on the date on which the application is made;
(b) the debtor has been ordinarily
resident in Jersey during the 5 years immediately preceding the date on
which the application is made;
(c) the debtor has not been
the subject of a debt remission order within the 5 years immediately
preceding the date on which the application is made;
(d) the debtor is not
bankrupt within the meaning of Article 8 of the Interpretation (Jersey)
Law 1954[3];
(e) the amount the debtor
owes in qualifying debts is less than £20,000 or such other amount as may
be prescribed;
(f) the value of the assets
of the debtor (excluding a motor vehicle with a value not more than £2,000
or such other amount as may be prescribed), does not exceed £5,000 or
such other amount as may be prescribed; and
(g) after the deduction of
tax, social security contributions and normal household expenses, the
debtor’s monthly disposable income is less than £100 or such other amount
as may be prescribed.
(2) A
debtor shall not be eligible for a debt remission order unless the debtor acts
in good faith.
(3) For
the purposes of paragraph (2), good faith does not include any of the
following conduct by the debtor –
(a) within
2 years prior to the date of the application –
(i) failing to keep
or produce records relating to a loss of property by the debtor or by a
business carried on by the debtor, or
(ii) entering into a
transaction at undervalue;
(b) within one year prior
to the application for the debt remission order, giving a preference to a
person;
(c) incurring
a debt knowing that he or she would be unable to pay the debt or being reckless
as to such ability;
(d) failing
to account satisfactorily for loss of property or for insufficiency of property
to meet his or her debts;
(e) carrying
on any gambling, rash and hazardous speculation or unreasonable extravagance
which may have materially contributed to or increased his or her inability to
pay his or her debts;
(f) careless
neglect of business affairs materially contributing to or increasing his or her
inability to pay his or her debts;
(g) fraud
or fraudulent breach of trust; and
(h) failing to co-operate with the approved intermediary or with the
Viscount.
(4) For
the purposes of this Article, a debtor enters into a transaction at undervalue
if the debtor alienates property of any sort, either gratuitously or for significantly
less than the property is worth.
(5) For
the purposes of this Article, a debtor gives a preference to a person if –
(a) the
person is a creditor of the debtor or a surety or guarantor for a debt or other
liability of the debtor; and
(b) the
debtor –
(i) does anything, or
(ii) suffers anything
to be done,
that has the effect of putting the person into a position which, in
the event of a debt remission order being granted in respect of that
debtor’s property, will be better than the position he or she would have
been in if that thing had not been done.
5 Assistance
and consideration by approved intermediary
(1) The
Minister may by Order approve a person to be an intermediary.
(2) An
application under Article 3 must be made to the Viscount through an
approved intermediary.
(3) An
approved intermediary shall assist a debtor in making an application and shall
check that an application is properly completed and shall, before the
application is made, inform the debtor of –
(a) all
the conditions to which an application for, and making of, a debt remission
order is subject, as follows –
(i) that checks may
have to be made to verify that the debtor meets the eligibility criteria under Article 4,
and
(ii) that the approved
intermediary must give its conclusions on the application to the Viscount under
paragraph (4) and that the debtor will be informed of such conclusions
when the application is sent to the Viscount; and
(b) the
consequences of making the application including the potential criminal
liability of the debtor under Part 3.
(4) An
approved intermediary through which an application is made shall assess the
application having regard to the eligibility criteria referred to in Article 4(1)
and (2) and shall offer its conclusion to the Viscount to assist the Viscount
in determining the application.
(5) An
approved intermediary through which an application is made shall submit the
application to the Viscount together with notice in writing of its conclusion.
(6) The
Minister may by Order provide for fees to be payable to an approved intermediary
who assists a debtor under this Article.
6 Grant or refusal of debt remission order
(1) The
Viscount shall apply the following presumptions when determining an application
for a debt remission order –
(a) that,
subject to Article 4, the debtor is eligible for a debt remission order if
such appears to be the case from the information supplied, and there is no
reason to believe that the information is inaccurate or incomplete or that the
debtor’s circumstances have changed;
(b) that
the debts specified at the date of the application are qualifying debts, unless
the Viscount has reason to believe otherwise.
(2) The
Viscount may consider an application for a debt remission order on the basis of
the documents received and without oral arguments by the parties.
(3) The
Viscount may stay consideration of an application for a debt remission order
until the Viscount has received answers to any queries raised with the debtor by
the Viscount in relation to anything connected with the application.
(4) Without
prejudice to the generality of paragraph (3), the Viscount –
(a) may,
in relation to the application, make such enquiries of the debtor, the approved
intermediary or any other person as the Viscount considers appropriate;
(b) is
not bound by any enactment or rule of law relating to the admissibility of
evidence in proceedings before the courts.
(5) The
Viscount shall, in determining an application for a debt remission order, have
regard to the conclusion of the approved intermediary and shall –
(a) refuse
to grant the debt remission order if the Viscount is satisfied that –
(i) the debtor is not
eligible for the grant of a debt remission order under Article 4,
(ii) the debtor has no
qualifying debts, or
(iii) if any queries raised
with the debtor have not been answered to the satisfaction of the Viscount
within such time as the Viscount may specify; or
(b) grant
a debt remission order in relation to the debts that the Viscount is satisfied
were qualifying debts of the debtor at the application date if satisfied that
the debtor is eligible for the grant of the debt remission order.
(6) The
Viscount shall within 5 working days of granting a debt remission order or
refusing to make a debt remission order give notice in writing to –
(a) the
debtor;
(b) the
approved intermediary; and
(c) in
the case of a grant of a debt remission order, each creditor to whom a debt
included in the list of the debtor’s qualifying debts under paragraph (10)(b)
is owed.
(7) Where
the Viscount grants a debt remission order, the notice referred to in paragraph (6)
shall include notice to the creditor of –
(a) the
making of the debt remission order and its effect;
(b) the
grounds on which a creditor may object; and
(c) any
information as may be prescribed.
(8) Where
a debt remission order is refused, the Viscount shall, in the notice referred
to in paragraph (6), give reasons for the refusal and inform the applicant
of the applicant’s right of appeal under Article 13.
(9) Subject
to paragraph (10), the Viscount shall within 5 working days of making
a debt remission order issue a copy of the debt remission order to the debtor.
(10) A debt
remission order shall –
(a) be
in the form determined by the Viscount; and
(b) include
a list of the debts which the Viscount is satisfied were qualifying debts of
the debtor at the application date, specifying the description of the debt, amount
of the debt at that time and the creditor to whom it was then owed.
(11) Where a
debt remission order is made the Viscount shall make the appropriate entry in
the Register.
(12) The
Minister may by Order specify any additional action to be taken by the Viscount
or the debtor on the making of a debt remission order.
7 Debt Remission Register
(1) The
Viscount shall establish and maintain a register to be known as the Debt
Remission Register.
(2) The
Register shall be kept in such form as may be prescribed and the Viscount shall
enter in the Register such information as may be prescribed relating to a debt
remission order.
(3) The
Viscount shall make arrangements for –
(a) public inspection of
the Register; and
(b) subject to payment of
the prescribed fee, the supply of certified or uncertified copies or extracts
of entries in the Register.
8 Creditor’s
objection
(1) Subject
to paragraph (2), a creditor in relation to whom a debt included in the
list of a debtor’s qualifying debts under Article 6(10)(b) is owed
may object –
(a) to
the making of the debt remission order;
(b) to the
inclusion of the debt in the list; or
(c) to the
accuracy of the description or the amount of the debt specified in the debt
remission order.
(2) An
objection under paragraph (1) shall –
(a) be
submitted within such time as may be prescribed but in any event not more than
28 days after the creditor has been notified of the making of the debt
remission order;
(b) be made
in writing; and
(c) be supported
by such information and documents as may be prescribed.
9 Review
by Viscount
(1) The
Viscount shall consider an objection made under Article 8.
(2) The
Viscount may –
(a) as
part of his or her consideration of an objection under paragraph (1) or on
his or her own initiative, carry out such investigation in respect of the debt
remission order as he or she thinks fit; and
(b) as
part of the investigation referred to in paragraph (a), require any person
to give the Viscount such information and assistance as the Viscount may
reasonably require in connection with such investigation.
(3) The
Viscount shall, having considered the objection and having regard to any finding
on an investigation under paragraph (2) –
(a) affirm
the debt remission order;
(b) revoke
the debt remission order (in which case the moratorium referred to in Article 10(1)
terminates) or amend the debt remission order; or
(c) refer
the matter to the Royal Court for directions or an order relating to the
matter.
(4) Upon
a matter being referred to the Royal Court under paragraph (3)(c), the
Royal Court may give any direction or make any order as it thinks fit including
an order quashing a decision of the Viscount or revoking or amending the debt
remission order.
(5) A
person who fails to comply with a requirement under paragraph (2)(b) shall
be guilty of an offence and liable to imprisonment for a term of 6 months
and a fine.
10 Moratorium
(1) A
moratorium shall commence on the date of entry of the debt remission order in
the Register under Article 6 and shall continue for a period of one year
beginning on the date of commencement unless the debt remission order is
revoked under Article 9(3) or (4) or Article 11(7) or (8) (in which
case the moratorium terminates) or the moratorium period is extended by the
Viscount or the Royal Court under paragraph (2).
(2) Subject
to paragraph (3), the Viscount or the Royal Court may, for the purpose of –
(a) carrying
out or completing an investigation under Article 9; or
(b) taking
any action the Viscount or the Royal Court considers necessary (whether as a
result of an investigation or otherwise) in relation to the debt remission
order,
extend the moratorium period for a maximum of 3 months
beginning after the end of the initial moratorium period of one year referred
to in paragraph (1).
(3) Under
paragraph (2), a moratorium period may be extended more than once, but any
extension (including the first extension) must, before the moratorium period
ends, be notified to the debtor and every creditor to whom a debt included in
list of the debtor’s qualifying debts under Article 6(10)(b) is owed.
(4) Subject
to paragraph (5), during a moratorium period, a creditor to whom a debt
included in list of the debtor’s qualifying debts in the debt remission
order under Article 6(10) is owed –
(a) has
no remedy in respect of the qualifying debt; and
(b) shall
not –
(i) apply for a
declaration of désastre in reliance on
the qualifying debt, or
(ii) otherwise
commence any action or other legal proceedings against the debtor for the qualifying
debt, except with the permission of the Royal Court and on such terms as the Royal
Court may impose.
(5) A
secured creditor of a debtor may enforce his or her security during a
moratorium period.
11 Debtor’s
duties
(1) If an
application for a debt remission order is made, the debtor shall –
(a) give
to the Viscount such information;
(b) attend
before the Viscount at such times; and
(c) do
all such other things,
as the Viscount may reasonably require for the purpose of carrying
out his or her functions in relation to the application or the debt remission
order made as a result of the application.
(2) The
debtor shall, in writing, notify the Viscount as soon as is reasonably
practicable if the debtor becomes aware of –
(a) any
error in, or omission from, the information supplied to the Viscount in, or in
support of, an application for a debt remission order; and
(b) any
change in his or her circumstances between the date the application was made and
the date of determination of the application that would affect, or would have
affected, the application.
(3) Paragraphs (1)
and (2) shall apply before and after the determination of an application and
for as long as the Viscount is able to exercise his or her functions under this
Law.
(4) Where
a debt remission order is made, the debtor shall notify the Viscount as soon as
is reasonably practicable if –
(a) there
is an increase in his or her income during the moratorium period applicable to
the debt remission order;
(b) the
debtor acquires any property or any property is devolved upon him or her during
that period; or
(c) the
debtor becomes aware of any error in or omission from any information supplied
by him or her to the Viscount after the determination date.
(5) A debtor
shall not obtain credit during the moratorium period unless the debtor informs
the intending creditor of the debt remission order.
(6) A
debtor who contravenes paragraph (5) shall be guilty of an offence and liable
to imprisonment for a term of 6 months and to a fine.
(7) Where
the Viscount becomes aware or is notified of any matter mentioned in paragraph (2)
or (4), the Viscount may –
(a) revoke
the debt remission order (in which case the moratorium referred to in Article 10(1)
terminates) or amend the debt remission order; or
(b) refer
the matter to the Royal Court for directions or an order relating to the
matter.
(8) Upon
a matter being referred to the Royal Court under paragraph (7)(b), the
Royal Court may give any direction or make any order as it thinks fit including
an order or revoking or amending the debt remission order.
12 Discharge
from qualifying debts
(1) On
the expiry of the moratorium period applicable to a debt remission order, the
debtor shall be discharged from all the debts included in the list of the
debtor’s qualifying debts under Article 6(10)(b), including any
interest, penalties and other sums which may have become payable in relation to
those debts since the date on which the application was made under Article 3.
(2) Paragraph (1)
shall not apply if the moratorium referred to in Article 10(1) terminates
earlier than on the date of its expiry or in respect of a qualifying debt which
the debtor incurred as a result of fraud or fraudulent breach of trust to which
the debtor was a party.
(3) The
discharge of the debtor does not release any other person from –
(a) any
liability (whether as a partner, joint owner or tenant of the debtor or
otherwise) from which the debtor is released by the discharge; or
(b) any
liability as guarantor for the debtor or as a person in the nature of such a
guarantor.
13 Appeal
(1) A
debtor may appeal to the Royal Court against a decision of the Viscount, within
28 days of the decision being made, on any of the grounds specified in paragraph (3).
(2) A
creditor may appeal to the Royal Court against a decision of the Viscount under
Article 9(3)(a) or (b), within 28 days of the decision being made, on
any of the grounds specified in paragraph (3).
(3) The
grounds are that –
(a) the
Viscount was wrong to decide that –
(i) the debtor met or
did not meet the eligibility criteria referred to in Article 4, or
(ii) a particular debt
should or should not have been included in the list of the debtor’s
qualifying debts in the debt remission order; or
(b) the
amount or description of a debt included in the list of the debtor’s
qualifying debts in the debt remission order under Article 6(10) was not
accurate.
(4) On any
appeal under paragraph (1) or (2) the Royal Court may make such order as
it thinks fit, and may affirm, reverse or vary the decision of the Viscount, or
remit the matter with its opinion thereon to the Viscount.
PART 3
OFFENCES
14 False
and misleading information
(1) A
person who makes a statement in any document, material, evidence or information
that is required to be provided to the Viscount under this Law that –
(a) at
the time and in the light of the circumstances under which it is made, is false
or misleading with respect to any material fact; or
(b) omits
to state any material fact the omission of which makes the statement false or
misleading,
shall be guilty of an offence and liable to imprisonment for a term
of 7 years and to a fine.
(2) A person
shall not be guilty of an offence under paragraph (1) if the person did
not know that the statement was false or misleading and with the exercise of all
due diligence could not have known that the statement was false or misleading.
15 Concealment
or falsification of documents
(1) A
person who falsifies, conceals, destroys or otherwise disposes of, or causes or
permits the falsification, concealment, destruction of or disposal of,
information or documents which he or she knows or suspects are or would be
required or relevant in relation a debt remission order, shall be guilty of an
offence and liable to imprisonment for a term of 7 years and a fine.
(2) Paragraph (1)
applies regardless of whether the debt remission order was revoked after the
commission of the offence.
(3) A
person shall not be guilty of an offence under paragraph (1) if the person
proves that he or she had no intention of concealing facts disclosed by the
information or documents.
16 Fraudulent
disposal of property
(1) A
debtor in respect of whom a debt remission order has been made and who
fraudulently disposes of any property during the 3 years immediately
preceding the application date or during the moratorium period applicable to
the debt remission order shall be guilty of an offence and liable to
imprisonment for a term of 2 years and a fine.
(2) Paragraph (1)
applies regardless of whether the debt remission order was revoked after the
commission of the offence.
17 Fraudulent
dealing with property obtained on credit
(1) A
debtor who during the moratorium period applicable to a debt remission order
made in relation to the debtor disposes of property that he or she acquires on
credit for which he or she has not paid and any other person who knowingly
receives such property shall be guilty of an offence and liable to imprisonment
for a term of 7 years and a fine.
(2) A debtor
shall not be guilty of an offence under paragraph (1) if the disposal or
acquisition was in the ordinary course of the debtor’s business, having
regard to the price paid for the property.
18 Obtaining
credit or engaging in business during the moratorium period
(1) A
debtor who (whether alone or jointly with another person) during the moratorium
period applicable to a debt remission order made in relation to the debtor –
(a) obtains
credit in an amount greater than the amount prescribed for that purpose; or
(b) trades
in a name other than that in which the debt remission order was made without
disclosing the debtor’s status to the person with whom the debtor is
trading,
shall be guilty of an offence and liable to imprisonment for a term
of 2 years and a fine.
(2) A
person may be guilty of an offence committed under paragraph (1) notwithstanding
that the conduct or transaction complained of was done or effected outside
Jersey.
19 Criminal
liability of partners, directors and other officers
(1) Where
an offence under this Law committed by a limited liability partnership, a
separate limited partnership, any other partnership having separate legal
personality or a body corporate is proved to have been committed with the
consent or connivance of –
(a) a person who is a partner of the partnership, or director,
manager, secretary or other similar officer of the body corporate; or
(b) any person purporting to act in any such capacity,
the person is also guilty of the offence and liable in the same
manner as the partnership or body corporate to the penalty provided for that
offence.
(2) Where
the affairs of a body corporate are managed by its members, paragraph (1)
applies in relation to acts and defaults of a member in connection with the
member’s functions of management as if he or she were a director of the
body corporate.
PART 4
MISCELLANEOUS PROVISIONS
20 Regulations
The States may by Regulations –
(a) amend
any provision of this Law;
(b) make
such consequential, incidental, supplementary and transitional provision as
appear to the States to be necessary or expedient for the
purposes of the Law.
21 Orders
The Minister may, by Order, make provision for any matter which may
be prescribed under this Law.
22 Rules
of Court
The power to make Rules of Court under the Royal Court (Jersey) Law 1948[4] shall include the power to
make Rules for the purposes of this Law.
23 Amendment
of Interpretation (Jersey) Law 1954
In Article 8 of the Interpretation (Jersey) Law 1954[5] in the definition
“bankrupt” after paragraph (b) there shall be inserted the
following paragraph –
“(ba) the grant by the Viscount of a debt
remission order in respect of that person’s qualifying debts under the
Debt Remission (Individuals) (Jersey) Law 2016[6];”.
24 Citation
and commencement
This Law may be cited as the Debt Remission (Individuals) (Jersey)
Law 2016 and shall come into force 7 days after it is registered.
dr. m. egan
Greffier of the States