DEBT REMISSION (INDIVIDUALS) (JERSEY) LAW 2016
The full Debt Remission Order Guide can be downloaded here.
Where an individual cannot apply for bankruptcy (for example, if there are not realisable assets), they might be able to apply for a Debt Remission Order (DRO) instead.
Please note that not all debts can be referred for consideration of a DRO.
A DRO is an out-of-court settlement with two sets of qualifying conditions:
- 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
- Their disposable income does not exceed £100 per month (After deduction of tax, social security contributions, and normal household expenses
- 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.
Citizens Advice is the authorised intermediary to analyse income and expenditure, ensure that the adversity test is passed, and to draw conclusions to make a referral to the Viscount’s Department who have the final decision on whether it can be considered or not. The overarching principle is 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 to and given a chance to contest the decision. Once a DRO is granted, a 12-month ‘moratorium’ period is put in place where 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 DROs that have been granted will be held on the Viscount’s website for 15 months, after which time it expired, and details will be removed.