Change bankruptcy laws to help debtors, says CAB

JERSEY’S bankruptcy laws should be overhauled to bring vital relief to debt-ridden Islanders, the Citizens Advice Bureau has said.

Francis Le Gresley
Francis Le Gresley

JERSEY’S bankruptcy laws should be overhauled to bring vital relief to debt-ridden Islanders, the Citizens Advice Bureau has said.

Francis Le Gresley, manager of the CAB, said that many of his clients were suffering because it was almost impossible to be declared bankrupt in Jersey.

In England, a resident who is unable to repay his debts in the foreseeable future can simply complete a bankruptcy petition and statement of affairs and then satisfy the court that he can’t pay his debts.

In Jersey, an Islander has to appear before the Royal Court in person and prove that he is a ‘responsible’ debtor who has made every effort to repay the creditors.

Mr Le Gresley said that the current laws were leaving a legion of debt-ridden Islanders who, despite not being able to repay their debts, were constantly being harassed by creditors.

Comments for: "Change bankruptcy laws to help debtors, says CAB"

Clown Advocate

The idea of a "social desastre" is something which has become prominent in recent years. It is not "almost impossible" to be declared bankrupt in Jersey. What a strange comment.

Any form of personal bankruptcy is a serious matter and it seems to be absolutely right that it should be judicially supervised and made available only to those who have acted reasonably towards their creditors. At the end of the day, it does have to be a balancing exercise given that the rights of the creditors in a social desastre are effectively extinguished.

As Mr Le Gresley will well know, those who are owed money [for example small businesses] will get either very little or, more commonly, nothing at all. That is why it is important to make sure that the bankruptcy route is not abused. I can foresee that Mr Le Gresley's comments will provoke perhaps misinformed comment on the inadequacy of a law which has served the Island well. I would be interested to hear how he would propose to protect those who are owed money.

Nellie Macon

Precisely No.1 - our present laws are already inadequate in protecting creditors. It takes so long for the Viscount's Dept to go after people who are basically "en desastre" that they've already sold off or stashed away anything of value long before the Viscount's Dept are finally called in and the poor creditors who are fobbed off and lied to for months / years end up with nothing apart from a pittance in compensation and a load of legal fees which of course they have to foot themselves.

On the other hand I have known honorourable people who have gone out of business and have promised their creditors that their debts would be honoured but it might take some time and sure enough they have actually paid them off - might have taken years but they still did it.

Unfortunately if the "en desastre" law is amended to make bankruptcy too easy it will be open to even more abuse by unscrupulous businesses. People who go into business have to accept the responsibility for their actions.

Mogit

Clown-not an advocate, you obviously have never experienced financial hardship, well good for you, not all of us are in your position, let us hope you find yourself unemployed at sixty-three and being told don't bother to register with the job centre no one will employ you!!!!

Anyone facing no alternative but to go bankrupt should be given financial advice and not told you have been frivolous, every case should be judged on it's merits.

Mystery Banker

Although the law is somewhat old, it makes people realise that they cannot run away from their debts. Perhaps, we should look at the introduction of a law regulating lending and limiting it so that the repayments of any lending cannot exceed one third of that person's income. It would be a disaster to allow people to avoid their debts.

Clown Advocate

Mogit, there is no point in directing personal comments to people who have posted on this site. To do so reduces the force of what you say.

Why was your case judged to be frivolous?

Each case should, as you say, be judged on its merits. That is why the court must exercise a balancing exercise. How would you feel if you were a small trader who was about to go under due to bad debts which were then avoided?

truthseeker

There is a vast chasm between, running away from responsibility and debts,and having been seduced into deep debt by every conceivable trick in the book,storecards,credit cards with no initial charges then whammo you're in deep, buy now pay later schemes,all advertised extensively,the money lenders rely on the lack of financial savvy of a lot of working folks,who can usually tell you how much beans are in the supermarket but not how much compound interest they are paying on their credit situations,...Small print,a phrase we are warned about,why is it small,to hoodwink that's why otherwise it would be in LARGE PRINT right at the top with a warning..! and when C.A.B. wants to help, we get the squealing and oinking from the very people who profit from the lending game,the whole world is in trouble at the moment..why Bankers, and their sharp practices,while the money was rolling their way...not a word...suddenly they want to squeeze their victims.....Governments are the same..spend recklessly then blame the people for not paying enough tax....Let's not play their game... and support Francis Le Gresley.

sanity

Truthseeker – you mention the banks and I agree that they are sometimes all too eager to lend and but far less receptive once that lending has got out of hand and of course there is the popular conception that banks print their own money so this does not matter .

But what about the small traders, employees and individuals who get stung when people go bankrupt? CAB might be asking for adoption of UK laws but just look at the problems caused when the unscrupulous have the ability to declare themselves bankrupt with very few checks and balances. We need to ensure there is help available where this is needed but we must avoid this politically correct mentality of always favouring the wrongdoer at the expense of the victim. Perhaps tougher laws on bank lending and transparency and maybe some social clause or unfair terms legislation to avoid the traps planted in the small print but don’t blindly follow the UK.

Mouse organ

Small print is small until the banks or whoever put it there seek to rely on it. Then it suddenly becomes very important! Yes, there should be a rule which sets out that the terms of a loan or indeed any transaction should be properly spelt out and brought to the customer's attention.

Lending institions should also be stopped from giving too much credit. if that were to happen, though, someone would no doubt argue that they were creditworthy and the bank would then be the villain! I can just imagine the comments which would appear on this forum......

At the end of the day, though, some impartial body has to look at what has happened and decide on what should be done. Perhaps a good way forward might be for the process to be made more informal and dealt with by the Judicial Greffe rather than a full court. Whatever happens, there will be hardship to someone somewhere!