Debt management and relief for individual debtors
Debt management and relief for individual debtors

The following Restructuring & Insolvency guidance note provides comprehensive and up to date legal information covering:

  • Debt management and relief for individual debtors
  • Introduction
  • Debt Relief Orders
  • Consequences for a judgment creditor where the debtor enters into a DRO
  • Debt management schemes

Introduction

Part 5 of the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007) introduced new regimes for debt management and relief, although not all of them have been implemented. While these regimes are aimed at enabling individuals to manage their debt more effectively, there are clearly implications for creditors seeking to enforce judgments against such individuals.

  1. by amendment to the County Courts Act 1984, TCEA 2007, s 106 introduced a new form of administration procedure for debtors who do not have any business debts and whose income exceeds the amount required to meet their reasonable needs. TCEA 2007, s 106 has yet to be implemented

  2. by amendment to the County Courts Act 1984, TCEA 2007, s 107 introduced a provision for a debtor suffering from a ‘sudden and unforeseen deterioration in their financial circumstances’ to apply for an enforcement restriction order (ERO). TCEA 2007, s 107 has yet to be implemented

  3. by amendment to the Insolvency Act 1986 (IA 1986), TCEA 2007, s 108 introduced debt relief orders (DROs) as an alternative to bankruptcy for certain debtors. A DRO prevents creditors from enforcing without permission of the court. TCEA 2007, s 108 came into force on 24 February 2009 (for the purpose of making rules, regulations and orders) and 6 April 2009 (for all other purposes) and is therefore