Personal Insolvency (Amendment) Act 2015
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Court review of proposed Personal Insolvency Arrangement | ||
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21. The Principal Act is amended by the insertion of the following after section 115: | ||
“115A. (1) Where— | ||
(a) a proposal for a Personal Insolvency Arrangement is not approved in accordance with this Chapter, and | ||
(b) the debts that would be covered by the proposed Personal Insolvency Arrangement include a relevant debt, | ||
the personal insolvency practitioner may, where he or she considers that there are reasonable grounds for the making of such an application and if the debtor so instructs him or her in writing, make an application on behalf of the debtor to the appropriate court for an order under subsection (9). | ||
(2) An application under this section shall be made not later than 14 days after the creditors’ meeting referred to in subsection (16)(a) or, as the case may be, receipt by the personal insolvency practitioner of the notice of the creditor concerned under section 111A(6) (inserted by section 17 of the Personal Insolvency (Amendment) Act 2015), shall be on notice to the Insolvency Service, each creditor concerned and the debtor, and shall be accompanied by— | ||
(a) a statement of the grounds of the application, which shall include— | ||
(i) a statement that the proposal for a Personal Insolvency Arrangement has not been approved in accordance with this Chapter, | ||
(ii) other than where the proposed Personal Insolvency Arrangement is one to which section 111A applies, a statement identifying, by reference to the information referred to in paragraph (d)(i)(II) contained in the certificate furnished under paragraph (d), the creditor or creditors who, having voted in favour of the proposal, should, in the opinion of the personal insolvency practitioner, be considered by the court to be a class of creditors for the purpose of this section, and giving the reasons for this opinion, | ||
(b) a copy of the proposal for a Personal Insolvency Arrangement, | ||
(c) a copy of the report of the personal insolvency practitioner referred to in section 107(1)(d), | ||
(d) a certificate— | ||
(i) with the result of the vote taken at the creditors’ meeting and identifying— | ||
(I) the proportions of the respective categories of votes cast by those voting at the creditors’ meeting, and | ||
(II) the creditors who voted in favour of and against the proposal, and the nature and value of the debt owed to each such creditor, | ||
or | ||
(ii) where applicable, stating that section 111A applies to the proposal and that the creditor concerned has notified the personal insolvency practitioner under section 111A(6) that the creditor does not approve of the proposal, | ||
and | ||
(e) a statement by the personal insolvency practitioner to the effect that he or she is of the opinion that— | ||
(i) the debtor satisfies the eligibility criteria for the proposal of a Personal Insolvency Arrangement specified in section 91, | ||
(ii) the proposed Personal Insolvency Arrangement complies with the mandatory requirements referred to in section 99(2), and | ||
(iii) the proposed Personal Insolvency Arrangement does not contain any terms that would release the debtor from an excluded debt or an excludable debt (other than a permitted debt) or otherwise affect such a debt. | ||
(3) A notice to a creditor under subsection (2) shall be accompanied by a notice indicating that he or she may, within 14 days of the date of the sending of the notice, lodge a notice with the appropriate court, setting out whether or not the creditor objects to the application, and the creditor’s reasons for this. | ||
(4) A creditor who lodges a notice under subsection (3) shall at the same time send a copy of the notice to the Insolvency Service, the personal insolvency practitioner and each creditor concerned. | ||
(5) Where an application is made under this section before the expiry of the period of the protective certificate, such protective certificate shall continue in force until— | ||
(a) the Personal Insolvency Arrangement comes into effect under subsection (13), or | ||
(b) one of the following occurs— | ||
(i) the time for bringing an appeal against a refusal of the appropriate court to make an order under subsection (9) has expired without any such appeal having been brought, | ||
(ii) such appeal has been withdrawn, or | ||
(iii) the appeal has been determined. | ||
(6) The appropriate court, for the purpose of an application under this section, shall hold a hearing, which hearing shall be on notice to the Insolvency Service, the personal insolvency practitioner and each creditor concerned. | ||
(7) A hearing under this section shall be held with all due expedition. | ||
(8) The court shall consider whether to make an order under subsection (9) only where— | ||
(a) it is satisfied that— | ||
(i) the eligibility criteria specified in section 91 have been satisfied, | ||
(ii) the mandatory requirements referred to in section 99 have been complied with, and | ||
(iii) the proposed Arrangement does not contain any terms that would release the debtor from an excluded debt or an excludable debt (other than a permitted debt) or otherwise affect such a debt, | ||
and | ||
(b) it considers that, having regard to the information before it, including information contained in a notice under subsection (3), no ground specified in section 120 applies in relation to the debtor or the proposed Arrangement. | ||
(9) The court, following a hearing under this section, may make an order confirming the coming into effect of the proposed Personal Insolvency Arrangement only where it is satisfied that— | ||
(a) the terms of the proposed Arrangement have been formulated in compliance with section 104, | ||
(b) having regard to all relevant matters, including the terms on which the proposed Arrangement is formulated, there is a reasonable prospect that confirmation of the proposed Arrangement will— | ||
(i) enable the debtor to resolve his or her indebtedness without recourse to bankruptcy, | ||
(ii) enable the creditors to recover the debts due to them to the extent that the means of the debtor reasonably permit, and | ||
(iii) enable the debtor— | ||
(I) not to dispose of an interest in, or | ||
(II) not to cease to occupy, | ||
all or a part of his or her principal private residence, | ||
(c) having regard to all relevant matters, including the financial circumstances of the debtor and the matters referred to in subsection (10)(a), the debtor is reasonably likely to be able to comply with the terms of the proposed Arrangement, | ||
(d) where applicable, having regard to the matters referred to in section 104(2), the costs of enabling the debtor to continue to reside in the debtor’s principal private residence are not disproportionately large, | ||
(e) the proposed Arrangement is fair and equitable in relation to each class of creditors that has not approved the proposal and whose interests or claims would be impaired by its coming into effect, | ||
(f) the proposed Arrangement is not unfairly prejudicial to the interests of any interested party, and | ||
(g) other than where the proposal is one to which section 111A applies, at least one class of creditors has accepted the proposed Arrangement, by a majority of over 50 per cent of the value of the debts owed to the class. | ||
(10) In considering whether to make an order under subsection (9), the court shall have regard to: | ||
(a) the conduct, within the 2 years prior to the issue of the protective certificate under section 95, of— | ||
(i) the debtor in seeking to pay the debts concerned, and | ||
(ii) a creditor in seeking to recover the debts due to the creditor; | ||
(b) the following, where details of them are contained in a notice lodged under subsection (3) by a creditor— | ||
(i) a submission made by the creditor under section 98(1) or an indication given by the creditor under section 102(1) and the date on which such submission was made or indication was furnished, and | ||
(ii) any alternative option available to the creditor for the recovery of the debt concerned. | ||
(11) The registrar of the appropriate court shall notify the Insolvency Service and the personal insolvency practitioner concerned where the court makes or refuses to make an order under subsection (9). | ||
(12) On receipt of a notification under subsection (11) of the making of an order under subsection (9), the Insolvency Service shall register the Personal Insolvency Arrangement concerned in the Register of Personal Insolvency Arrangements. | ||
(13) The Personal Insolvency Arrangement shall come into effect upon being registered in the Register of Personal Insolvency Arrangements. | ||
(14) The court, in an application under this section, shall make such other order as it deems appropriate, including an order as to the costs of the application. | ||
(15) For the purposes of its consideration of an application under this section, the appropriate court may accept— | ||
(a) the certificate of the personal insolvency practitioner referred to in subsection (2)(d)(i) as evidence of the proportions of the respective categories of votes cast by those voting at the creditors’ meeting and of the creditors who have voted in favour of and against the proposed Personal Insolvency Arrangement and of the nature and value of the debt owed to each such creditor, | ||
(b) the certificate of the personal insolvency practitioner referred to in subsection (2)(d)(ii) as evidence that the proposed Arrangement has not been approved in accordance with section 111A, and | ||
(c) the statement of the personal insolvency practitioner referred to in subsection (2)(e) as evidence of any matter referred to in subsection (8) which is the subject of that statement. | ||
(16) For the purposes of this section, a proposal for a Personal Insolvency Arrangement is not approved in accordance with this Chapter where— | ||
(a) at a creditors’ meeting held under this Chapter, it is not approved in accordance with section 110 or, as the case may be, deemed to have been approved under section 108(8) (a) (as amended by section 15 (b) of the Personal Insolvency (Amendment) Act 2015), or | ||
(b) in the case of a proposal for a Personal Insolvency Arrangement to which section 111A applies, the creditor concerned has notified the personal insolvency practitioner in accordance with section 111A(6) that the creditor does not approve of the proposal. | ||
(17) (a) For the purposes of this section, and subject to paragraph (b), the court may consider— | ||
(i) one creditor, or | ||
(ii) more than one creditor, where the court considers the creditors to have, in relation to the debtor, interests or claims of a similar nature, | ||
to be a class of creditor. | ||
(b) In deciding under paragraph (a) whether to consider a creditor or creditors to be a class of creditor, the court shall have regard to the circumstances of the case, including, having regard to the statement of the grounds of the application referred to in subsection (2)(a) and the certificate referred to in subsection (2)(d)(i) — | ||
(i) the overall number and composition of the creditors who voted at the creditors’ meeting, and | ||
(ii) the proportion of the debtor’s debts due to the creditors participating and voting at the creditors’ meeting that is represented by the creditor or creditors concerned. | ||
(18) In this section— | ||
‘relevant debt’ means a debt— | ||
(a) the payment for which is secured by security in or over the debtor’s principal private residence, and | ||
(b) in respect of which— | ||
(i) the debtor, on 1 January 2015, was in arrears with his or her payments, or | ||
(ii) the debtor, having been, before 1 January 2015, in arrears with his or her payments, has entered into an alternative repayment arrangement with the secured creditor concerned.”. |