Debt Remission
(Individuals) (Jersey) Law 2016
A LAW to provide for debt remission
for individuals who are unable to pay their debts.
Commencement [see endnotes]
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;
“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) 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;
(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 shall include the power to make Rules for the purposes of this Law.
23 Citation
This Law may be cited as the Debt Remission (Individuals) (Jersey)
Law 2016.