Citizens Advice Bureau

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DEBT REMISSION (INDIVIDUALS) (JERSEY) LAW 2016


(23 June, 2016)

The full Debt Remission Order Guide, can be downloaded here

 

PLEASE NOTE: ONLY JERSEY QUALIFYING DEBTS THAT ARE WITHIN JURISDICTION MAY BE REFERRED FOR CONSIDERATION OF A DRO


Background


Personal bankruptcy (or Social Désastre), in Jersey, has been one of Citizens Advice Jersey’s campaigning issues 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 Citizens Advice Jersey, 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 subsequently put out for public consultation.

 

Proposals


A Debt Remission Order (DRO) is an out-of-court settlement with two sets of qualifying conditions;

1. Financial Criteria
Subject to a qualifying period of five years residence in the Island, individuals will be eligible for a DRO on the condition that;
- their debts do not exceed £20, 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


Citizens Advice Jersey has been 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 DRO is granted, the overarching principle being that a DRO is only available to individuals who have no realistic chance of ever re-paying their debts.
Before a DRO is granted, creditors will be written out to and given a chance to contest the decision. Once a DRO is granted, a 12 month ‘moratorium’ 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’
Once a DRO has been granted the debtor is prevented from obtaining further credit of more than £500, for the time that the moratorium is in place.
Information on DRO’s 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.
The legislation came into force on 8 April, 2016.


Malcolm Ferey
Chief Executive
Jersey Citizens Advice Bureau Limited
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