New bankruptcy law put up for public consultation

ISLANDERS who are mired in debt would have a way out of spiralling poverty if a proposed new bankruptcy law gets the go-ahead, according to the Citizens Advice Bureau.

Malcolm Ferey, the manager of the CAB
Malcolm Ferey, the manager of the CAB

ISLANDERS who are mired in debt would have a way out of spiralling poverty if a proposed new bankruptcy law gets the go-ahead, according to the Citizens Advice Bureau.

A public consultation has just been launched on the proposal, which would give the Viscount discretionary power to freeze a person’s debt up to the value of £25,000 and after a year write off the debt completely.

Malcolm Ferey, the manager of the CAB, said that the organisation had been campaigning for the change for a long time.

Comments for: "New bankruptcy law put up for public consultation"

kermit

Cool! I am so getting a credit card tomorrow :)

Alfred

That is precisely why personal bankruptcy has to be very carefully supervised.

The Viscount has discretion to allow or to disallow an application.

Unfortunately, the attitude which you voice makes things difficult for honest people who are unfortunate enough to encounter personal bankruptcy.

s

like those 9, yes 9 who would have benefitted from it last year. What a waste of time if its for such a small percentage of the populace!

yesrej evol i

same thing in uk...ordinary folk ordering new kitchens/bedrooms/cars etc then putting themselves in bankrupt procedures...company's beware ...totally MAD IDEA recipe for disaster...

The World Gone Mad

Couldn't agree more.

"Spiralling poverty"!

There will be cases of poverty but a lot of the time I think spiralling debt would be a more appropriate phrase here.

If you have the nerve to live the life of 'Riley' at others expense, you can just swan through life these days with not a care in the world and leave a wake misery behind you for others to pick up the pieces.

What about taking responsibility for your own actions, what example does this set to the next generation and where did living within your means ever go?

Just hope the Viscount uses his/her discretion wisely and considers the real reason behind someone making themselves bankrupt using this new bankruptcy laws, should it get passed.

Beaumont

What about the people who are owed the money?

I have an old fashioned attitude with this. If every country, every business, and every person had a sensible approach to money, we'd all be in a better position right now

If someone has borrowed beyond their means, they should be forced to repay that debt in full. I'd rather see a return to the days where people were sent to jail for bankruptcy

Martin

But the creditor used to have pay for the debtor to remain in prison.

Furthermore, you have leftist type people waffling on about "human blights".

Alison

What a ridiculous idea to jail someone for owing money. It is not a crime to owe money. With all the huge personally owned businesses that are in debt, shall we jail them all when they don't pay ? How stupid your comment is Beaumont. La Moye would need a huge extension and who is going to pay to keep people there ? Me? the tax payer.... Absolutely NO WAY am I paying more tax to put anyone in jail. This new bankruptcy law is a great idea and will help people start again, it is not a ticket for incurring debt and just not paying. Its for those in need.

James

It is a crime to take money from someone knowing that you are unable to pay back. In corporate terms, that would be "trading whilst insolvent", or in personal terms, committing a fraud. For example, if you have debts already that you cannot afford to pay off, and you then persuade me to lend you money on the basis of assurances which you know to be false, jail for you I would hope. It would be me who is the victim, not you.

Overpopulated

I doubt if you would take this view if you had a business that was owed money by people who have purchased things or had work done knowing they could not pay.

This can have the knock on effect of putting small traders out of business.

Not everyone is responsible about borrowing!

JT

Interesting theory Beaumont, does that mean you would bang up the shareholders of HMW, Woolies, etc? And what about Greece - would they as a nation face a spell inside too?

Joking aside though, I do agree with your point about the approach to money. People should borrow responsibly.....and lenders should lend responsibly!!! In a way the banks that through money around like confetti are reaping what they sow.

JT

And people who post on the internet should learn how to type and spell properly, :-(. Sorry!!

Pete Webb

CAB - Are you mad. This would mean the collapse of most traders.

Mo

Great encouragement.... everyone will be declearing bankruptcy .. how ridiculous can you get advising this .. people will start moving their money around and all in good time they will suddenly become bankrupt... honestly who has no brains!!!!!!

Richard

What if you have debt of £200,000 ? Does it mean only £25,000 will be written off, or that £175,000 will be written off ? Its confusing. Give us the exact details please.

M Ferey

Rather than have to read through the whole consultation paper, which is on the gov.je website, here is the media release which provides a concise summary and history of the proposal...

Bankruptcy (Désastre) (Jersey) Law 1990 – ‘Social Désastre’

Background

Personal bankruptcy (or Social Désastre) in Jersey has been a campaigning issue for the Jersey Citizens Advice Bureau for a long time.

In April, 2010, the Jersey Law Commission produced a consultation paper and a report in March, 2011, on the issue of Social Désastre, with a recommendation that the law was in need of an up-date. The main problem being that there exists a situation in Jersey where an individual will not have access to the bankruptcy system if they have no realisable assets. We therefore end up with some occasions where debtors can be ‘too poor to become bankrupt’

In July, 2012, the Legislation Advisory Panel called upon officers from the Law Officers’ Department, The Viscount’s Department and the Jersey Citizens Advice Bureau, to form a team to consider a Jersey equivalent of a UK Debt Relief Order and to report back to the panel in September, 2012.

This team worked together to produce a report and brief which has formed the basis of a green paper, this paper was presented to the Council of Ministers in December, 2012, and is now out for public consultation.

Proposals

A Viscount’s Remission Order (VRO) is an out-of-court settlement with two sets of qualifying conditions;

1. Financial Criteria

Subject to a qualifying period of residence in the Island, individuals will be eligible for a VRO on the condition that;

- their debts do not exceed £25 000

- they do not own a motor vehicle whose value exceeds £2 000

- they do not possess other assets exceeding £5 000: and

- their disposable income does not exceed £100 a month (after deduction of tax, social security contributions and normal household expenses)

2. Adversity Test

Applicants must be able to demonstrate that they are in their predicament through an adverse set of life changing circumstances, i.e. long-term illness, loss of employment, death of a partner etc.

Practical / Policy

It is proposed that the Jersey Citizens Advice Bureau will be appointed as the authorised intermediary to analyse income and expenditure, ensure that the adversity test is passed and draw conclusions to make a referral to the Viscount’s Department, who have the final decision on whether or not a VRO is granted, the overarching principle being that a VRO is only available to individuals who have no realistic chance of ever re-paying their debts.

Before a VRO is granted, creditors will be written out to and given a chance to contest the decision. Once a VRO is granted, a 12 month ‘remission’ period is put in place when creditors cannot make further attempts to recover the debts, after the 12 month period the debts are effectively ‘written off’

Information on VRO that have been granted will be held on the Viscount’s website for 15 months, after which time it expires and details will be removed.

Comment

In relation to VRO, The Viscount commented as follows.

“I feel that it’s a necessary and encouraging development:

Necessary, due to the difficult and enduring economic situation which has engulfed some people in a spiralling poverty trap;

Encouraging, because here we have an example of how the public sector can work in collaboration with the Jersey Citizens Advice Bureau in furtherance of the public interest”.

Malcolm Ferey

Chief Executive

Jersey Citizens Advice Bureau Limited

-ends-

Mjolnir de Jersiaise

Perhaps it should depend on the reasons for the bankruptcy. For example, if you are struck down by illness, through no fault of your own, and are then forced into bankruptcy because of repeated visits to ineffectual Doctors, with their exorbitant medical fees, then maybe this law should be able to help you.

Annoyed

This would not be much of an issue, if people who are out of work and claiming benefits were unable to obtain financing on cars, electronics, holidays, etc.

Before people start having a go at me, I know of at least 3 people who fall in to this catagory.

Warren J

I have no issue with this as long as those who elect for a VRO are barred for life from getting credit in any form.

roombay42

or until the original debt was paid up in full.

James Wiley

As the holy book says...

"If the debtor is in a difficulty, grant him time till it is easy for him to repay. But if ye remit it by way of charity, that is best for you if ye only knew."

Or as my grandmother always said

Never a borrower or a lender be.

Debt is the currency of slaves.