Personal Insolvency (Amendment) Act 2015

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Approval of proposed Debt Settlement Arrangement where only one creditor

7. The Principal Act is amended by the insertion of the following after section 74:

“74A. (1) Where—

(a) a personal insolvency practitioner has prepared a proposal for a Debt Settlement Arrangement and the debtor has consented to that proposal, and

(b) only one creditor would be entitled to vote at a creditors’ meeting held under this Chapter (whether in respect of one or more debts),

the procedures specified in this section, and not those specified in sections 70, 72 and 73, shall apply in relation to the approval by that creditor of the proposal for a Debt Settlement Arrangement.

(2) A personal insolvency practitioner referred to in subsection (1) shall—

(a) give written notice to the creditor that the proposal for a Debt Settlement Arrangement has been prepared and that the creditor may, within the period specified in subsection (6) (a), notify the personal insolvency practitioner in writing of his or her approval or otherwise of that proposal,

(b) ensure that the notice referred to in paragraph (a) is accompanied by a copy of each of the documents referred to in section 71, and

(c) lodge a copy of the notice referred to in paragraph (a) and the documents referred to in paragraph (b) with the Insolvency Service.

(3) A personal insolvency practitioner who has complied with subsection (2) may, where he or she believes it is in the interests of obtaining approval of a proposed Debt Settlement Arrangement by the creditor and with the consent in writing of the debtor, prepare an amended proposal for a Debt Settlement Arrangement.

(4) Where the personal insolvency practitioner prepares an amended proposal for a Debt Settlement Arrangement pursuant to subsection (3) he or she shall—

(a) give written notice to the creditor that he or she may, within the period specified in subsection (6)(b), notify the personal insolvency practitioner in writing of his or her approval or otherwise of the amended proposal, which notice shall be accompanied by a copy of the amended proposal,

(b) give the debtor a copy of the documents referred to in paragraph (a), and

(c) lodge a copy of the documents referred to in paragraph (a) with the Insolvency Service.

(5) A proposal for a Debt Settlement Arrangement may, before the creditor has notified the personal insolvency practitioner of his or her approval or otherwise of the proposal, be subject to a proposal for a modification where the modification addresses an ambiguity or rectifies an error in the proposed Debt Settlement Arrangement and where—

(a) the modification has been proposed by the creditor or the personal insolvency practitioner, and

(b) the debtor gives his or her written consent to the modification.

(6) A creditor to whom this section applies shall notify the personal insolvency practitioner in writing of his or her approval or otherwise of a proposal for a Debt Settlement Arrangement within—

(a) 14 days of the giving to him or her of the notice under subsection (2), or

(b) if later, 7 days of the date on which a notice under subsection (4) (a) is first given to him or her.

(7) A proposal for a Debt Settlement Arrangement to which this section applies—

(a) shall be considered as having been approved by the creditor concerned where that creditor notifies the personal insolvency practitioner in accordance with subsection (6) of the creditor’s approval of that proposal, and

(b) where that creditor fails to comply with subsection (6), shall be deemed to have been approved by the creditor concerned.

(8) Where a creditor to whom this section applies notifies the personal insolvency practitioner in accordance with subsection (6) that he or she does not approve of the proposal, the Debt Settlement Arrangement procedure shall be deemed to have come to an end and the protective certificate issued under section 61 shall cease to have effect.

(9) Where a personal insolvency practitioner fails to give the creditor a notice under subsection (2) before the expiry of the protective certificate, the Debt Settlement Arrangement procedure shall be deemed to have come to an end.

(10) Where this section applies, a reference in section 61(13) to section 73 shall be construed as a reference to this section.”.