Bankruptcy

Enterprise Act 2002 -Why change the legislation?

Under the old rules the bankrupt would have been discharged after 2 years if unsecured debts were below £20,000, and 3 years if over 'that amount'. The restrictions placed on the individual included making it a criminal offence for an undischarged bankrupt to

• Obtain credit of £250 or more, either alone or with another person; this also covers obtaining credit by a statement or conduct.
• Managing a Limited company directly or indirectly, or acting as a company director without the leave of the Court.
• Many professionals believed that the old legislation was too draconian and did not reflect on today’s society and needs. For example an individual that has been made redundant from his/her occupation and is unable to secure full time employment thereby preventing him/her for servicing their unsecured debts are, in effect, treated exactly the same as an individual that has been culpable and reckless in their borrowing and who had set out with no intention of ever paying his/her creditors.

What are the key points of the new legislation?

Under the Enterprise Act 2002, those made bankrupt after April 2004, will generally be discharged after 1 year, less in some circumstances for example where the bankrupt has cooperated with the Official Receiver, “OR”, and or Trustee and matters relating to the bankrupt’s conduct and affairs has not been raised by creditors. The OR can file a notice at Court detailing that the investigation of the bankrupt’s affairs has been concluded or is unnecessary. In some instances it is proposed that the bankrupt will be discharged upon the date the notice is filed into court and this could be a matter of weeks.

The bankrupt will not be discharged if there is a Court order suspending his or her discharge. This will be made if the bankrupt has not cooperated with the OR or Trustee in bankruptcy, then the term will be extended. ...