Debt Relief Act (Northern Ireland) 2010: chapter 16 explanatory notes

Format:

Corporate Author:

Northern Ireland

Publisher:

TSO (The Stationery Office)

The procedures under the current law which individuals can use to free themselves from burdensome debts can only be accessed by those with funds or assets which can be sold to raise funds. Individuals unable to pay their debts as they fall due can attempt to set up an individual voluntary arrangement under Chapter 2 of Part 8 of the Insolvency (Northern Ireland) Order 1989. This will give them extra time to pay their creditors in full or in part. An arrangement is only feasible if the individual has assets which can be sold to raise money, or income over and above what they need to live on which they can use to pay their creditors by instalment. Individuals who have no prospect of being able to pay their debts can petition the Northern Ireland High Court to be declared bankrupt, though there are charges for this. Those who can neither fund an individual voluntary arrangement nor afford the cost of petitioning for bankruptcy are left without access to a remedy which they can use to free themselves from a lifetime burdened by debt they have no reasonable prospect of being able to pay. A Debt Relief scheme was brought into operation in England and Wales on 6 April 2009 to assist individuals in this position. This Act introduces a similar scheme in Northern Ireland.