Personal Insolvency Act 2012

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Variation of a Debt Settlement Arrangement.

82.— (1) Unless its terms provide otherwise, a Debt Settlement Arrangement may be varied in accordance with this section.

(2) The debtor’s written consent shall be required to any variation of a Debt Settlement Arrangement provided that any unreasonable refusal by the debtor to consent to a variation shall be subject to challenge in accordance with section 87 .

(3) A debtor shall be considered to be acting reasonably where the debtor refuses to consent to a variation of a Debt Settlement Arrangement where that variation would require the debtor—

(a) to make additional payments in excess of 50 per cent of the increase in his or her income available to him or her after the following deductions (where applicable) are made:

(i) income tax;

(ii) social insurance contributions;

(iii) payments made by him or her in respect of excluded debts;

(iv) payments made by him or her in respect of excludable debts that are not permitted debts;

(v) such other levies and charges on income as may be prescribed,

or

(b) to make a payment amounting to more than 50 per cent of the value of any property acquired by the debtor after the coming into effect of the Debt Settlement Arrangement unless receipt of that property had been anticipated by the terms of that Arrangement.

(4) Where it appears to the personal insolvency practitioner concerned that there has been a material change in the debtor’s circumstances which would affect his or her ability to make repayments under the Debt Settlement Arrangement, the personal insolvency practitioner (whether on his or her own initiative or at the request of a creditor) shall call a meeting of creditors to be held in accordance with this section.

(5) When calling a creditors’ meeting to be held under this section, the personal insolvency practitioner shall—

(a) give each creditor at least 14 days written notice of the meeting and the date on which, and the time and place at which, the meeting will be held,

(b) ensure that the notice referred to in paragraph (a) is accompanied by a written proposal for the variation of the Debt Settlement Arrangement, and

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

(6) A creditors’ meeting under this section shall be conducted in accordance with regulations under section 74 .

(7) Subject to subsection (8), creditors, at a creditors’ meeting under this section, shall vote, in accordance with section 73 —

(a) in favour of the approval of the proposal for the variation, or

(b) against the approval of the proposal for the variation.

(8) For the purposes of subsection (7), the voting rights exercisable by a creditor at a creditors’ meeting under this section shall be proportionate to the amount of the debt due by the debtor to the creditor on the date on which the vote takes place.

(9) Where the variation of a Debt Settlement Arrangement is approved under subsection (7), the personal insolvency practitioner shall as soon as practicable notify the Insolvency Service and each creditor concerned of the fact, and enclose with that notification a copy of the Debt Settlement Arrangement as varied.

(10) On receipt of a notification under subsection (9), the Insolvency Service shall record the variation in the Register of Debt Settlement Arrangements.

(11) A variation to a Debt Settlement Arrangement shall take effect immediately upon its being recorded under subsection (10), and shall remain in effect until the Debt Settlement Arrangement, as varied—

(a) is completed in accordance with its terms,

(b) is terminated in accordance with this Chapter, or

(c) is further varied in accordance with this section.

(12) A variation to a Debt Settlement Arrangement shall, while it is in effect, be binding upon the debtor and each creditor who was entitled to vote at the meeting held under this section, regardless of whether such creditor voted to approve that variation.

(13) References in this Chapter to a Debt Settlement Arrangement include references to such an Arrangement as varied in accordance with this section.