MINISTRY OF JUSTICE
News Release (006/08) issued by The Government News Network on 16
January 2008
People faced with
multiple low value debts could benefit from new court measures set
out in a consultation paper published by the Ministry of Justice today.
Under the proposals people who need extra time to pay off their
debts could go to court for a new Enforcement Restriction Order.
If granted this would provide temporary relief from the debt being
enforced and collected for a set period of time.
This will provide those with specified debts with some extra time
and provide a wider range of payment options. It will be
particularly aimed at people with several different low value
debts, and who have had a sudden change in their financial circumstances.
Civil Justice minister Bridget Prentice said:
"Debt's a problem that can affect anyone at any time -
unexpected costs can hit even the most diligent and careful
person. We want to ensure that people who run up debts are given
every possible opportunity to pay them off.
"The new Enforcement Restriction Order will give short-term
help to people who meet a sudden and unforeseen change to their
financial circumstances, from which they are soon likely to recover.
"This consultation also aims to clarify which debts should
be included in the longer-term payment scheme currently managed by
the county courts. Some debts, like those resulting from family
courts, must be paid on time to avoid creating misery for families
and children.
"The new measures will help people avoid getting deeper and
deeper into debt by providing a balanced approach to the problem.
It will help those who genuinely can't pay and are looking
for way to manage their debts effectively."
The consultation paper consults on the detail needed to make both
the revised Administration and new Enforcement Restriction Order
Schemes work effectively. This enlarges upon provisions made in
the Tribunal Courts and Enforcement Act 2007, which introduced
better ways of helping people manage their debts.
The paper also includes consultation on the debts that should be
included in Schemes and those that should be left out. Those to be
excluded include those non-provable in bankruptcy including fines,
sums due under orders made in family courts and Government student loans.
The revised Administrative Order is a long-term debt management
scheme administered by the court, restricted to those with maximum
debts of £15,000. The current Administration Order Scheme has been
unchanged since 1984 and while an order stipulates that creditors
named in the order cannot enforce their debts without leave of the
court, there has been a lack of consistency in the approaches
taken by different courts.
Other measures included in the consultation are:
* The amount
of surplus income needed before an Administration Order can be
made;
* The provision of information about a debtor's
financial circumstances;
* Providing notice of the intention
to dispose of assets;
* The introduction of a standard method
for calculating debts.
Notes to Editors
* The consultation Administration and Enforcement Restriction
Orders: Setting the Parameters which ends on 16 April 2008 is
available at http://www.justice.gov.uk/publications/cp0108.htm.
http://www.justice.gov.uk