|
|||||||
|
Frequently
Asked Questions about the Enterprise Act:
Individual > General < > Company < > Individual < > Crown Preference < > Financial Regime < ____________________________________
____________________________________ 1. What changes will affect bankruptcy discharge? The changes to bankruptcy discharge came into force on 1 April 2004. They mean that those made bankrupt after that date will generally receive their discharge one year after the date of the bankruptcy order. A bankrupt will not be discharged if there is a court order suspending his or her discharge. (These orders are generally made where the bankrupt has not co-operated with the Official Receiver or trustee in bankruptcy.) In some cases the bankruptcy discharge period will be less than one year. This will only occur:
____________________________________ 2. Does the Enterprise Act affect what happens to my assets? No. Your assets still form part of the bankruptcy estate, and, subject to certain exceptions already in place, the trustee may deal with them as necessary. The Act makes a slight change regarding a home. Detail of this is set out below. ____________________________________ 3. What are Bankruptcy Restrictions Orders (BROs)? BROs are a new civil regime to protect the public from bankrupt’s whose conduct has been irresponsible or reckless. A BRO generally imposes restrictions that apply after a bankrupt has been discharged. Those restrictions apply for between 2 and 15 years. ____________________________________ If you are due to be discharged less than one year after the provisions come into force there will be no change to the date of your discharge (unless the court has made an order to suspend the discharge period). If your discharge date is more than one year after the provisions come into force, then that period will be reduced and you will be discharged one year after the provisions come into force (unless the court has made an order to suspend the discharge period). Other Rules apply to second-time bankrupts. ____________________________________ 5. What happens to the discharge period if I have been bankrupt more than once? The position is different for an individual who has been an undischarged bankrupt more than once in the previous 15 years and who is still undischarged at the time the individual insolvency provisions come into force. In this case, if the court has previously granted a discharge, that order will continue to determine that date of discharge. If no such order has been made the bankrupt will be discharged on 1 April 2009 (5 years on from 1 April 2004), or by a court order under section 280 of The Insolvency Act. People made bankrupt through a criminal bankruptcy can only be discharged by order of the court. ____________________________________ 6. What changes are being made regarding a bankrupt’s home? The Act sets a
limit of 3 years on the period during
which the trustee in bankruptcy can deal
with a bankrupt's interest in a home which is the sole or
principal home of the bankrupt, the
bankrupt's spouse or a former spouse. After this period it will revert
back to the bankrupt (i.e. it will no
longer form part of the bankruptcy estate)
unless the trustee: ____________________________________ 7. What are ‘fast track’ Official Receiver IVAs? Individual voluntary arrangements (IVAs) are an alternative to bankruptcy, without the same automatic restrictions, where the debtor comes to an arrangement with his or her creditors about the repayment of his or her debts. The Enterprise Act introduced a new fast-track regime for post-bankruptcy IVAs where the Official Receiver is the proposed nominee. Under this regime, the proposal will be agreed with the Official Receiver and filed with the court. No meeting of the creditors will be called and it will not be possible to modify the proposal. The Official Receiver will send out the proposal to the creditors on a 'take it or leave it' basis and the creditors will either agree to or disagree with the proposal by correspondence. If the IVA is approved, the Official Receiver becomes supervisor and will notify the court which can then annul the bankruptcy order. Consequently, for post-bankruptcy IVAs the nominee/supervisor will either be a licensed insolvency practitioner (under the current IVA regime) or the Official Receiver (under the new "fast-track" regime). ____________________________________ 8. What is happening with Income Payments Orders (IPO) and Income Payments Agreements (IPA)? The IPO regime is designed to ensure bankrupts make an affordable contribution towards their debt. Generally they last for just under 3 years, and in most cases prior to the introduction of The Enterprise Act they ceased on discharge from bankruptcy. The Enterprise Act sets out that generally IPOs will in future last for 3 years from the date of the IPO. IPOs are made by the courts on the application of the trustee in bankruptcy and generally they are not contested. IPOs can be varied if the trustee or the bankrupt applies to the court. IPAs establish a legally binding written agreement between the bankrupt and the Official Receiver or trustee. An IPA requires the bankrupt (or a third party) to make specified payments to his trustee for a specified period. This will be enforceable in the same way as an IPO made by the court. An IPA must specify the period in which it is to have effect and that period can apply after a bankrupt is discharged but cannot extend to a date more than 3 years after the date of the IPA. An IPA may be varied in writing. ____________________________________ |
|||||||
|
|
|||||||
