Legislation – Tribunals, Courts and Enforcement Act 2007

“Part 6Administration Orders

Administration orders

112AAdministration orders

An administration order is an order—

(a)

to which certain debts are scheduled in accordance with section 112C, 112D or 112Y(3) or (4),

(b)

which imposes the requirement specified in section 112E on the debtor, and

(c)

which imposes the requirements specified in sections 112F to 112I on certain creditors.

112BPower to make order

(1)

F1The county court may make an administration order if the conditions in subsections (2) to (7) are met.

(2)

The order must be made in respect of an individual who is a debtor under two or more qualifying debts.

(3)

That individual (“the debtor”) must not be a debtor under any business debts.

(4)

The debtor must not be excluded under any of the following—

(a)

the AO exclusion;

(b)

the voluntary arrangement exclusion;

(c)

the bankruptcy exclusion.

(5)

The debtor must be unable to pay one or more of his qualifying debts.

(6)

The total amount of the debtor’s qualifying debts must be less than, or the same as, the prescribed maximum.

(7)

The debtor’s surplus income must be more than the prescribed minimum.

(8)

Before making an administration order, the county court must have regard to any representations made—

(a)

by any person about why the order should not be made, or

(b)

by a creditor under a debt about why the debt should not be taken into account in calculating the total amount of the debtor’s qualifying debts.

Scheduling debts

112CScheduling declared debts

(1)

This section applies to a qualifying debt (“the declared debt”) if—

(a)

an administration order is made, and

(b)

when the order is made, the debt is taken into account in calculating the total amount of the debtor’s qualifying debts for the purposes of section 112B(6).

(2)

If the declared debt is already due at the time the administration order is made, the F2… county court must schedule the debt to the order when the order is made.

(3)

If the declared debt becomes due after the administration order is made, the F2… county court must schedule the debt to the order if the debtor, or the creditor under the debt, applies to the court for the debt to be scheduled.

(4)

This section is subject to section 112AG(5).

112DScheduling new debts

(1)

This section applies to a qualifying debt (“the new debt”) if the debt—

(a)

arises after an administration order is made, and

(b)

becomes due during the currency of the order.

(2)

The F2… county court may schedule the new debt to the administration order if these conditions are met—

(a)

the debtor, or the creditor under the new debt, applies to the court for the debt to be scheduled;

(b)

the total amount of the debtor’s qualifying debts (including the new debt) is less than, or the same as, the prescribed maximum.

Requirements imposed by order

112ERepayment requirement

(1)

An administration order must, during the currency of the order, impose a repayment requirement on the debtor.

(2)

A repayment requirement is a requirement for the debtor to repay the scheduled debts.

(3)

The repayment requirement may provide for the debtor to repay a particular scheduled debt in full or to some other extent.

(4)

The repayment requirement may provide for the debtor to repay different scheduled debts to different extents.

(5)

In the case of a new debt scheduled to the order in accordance with section 112D, the repayment requirement may provide that no due repayment in respect of the new debt is to be made until the debtor has made all due repayments in respect of declared debts.

(6)

The repayment requirement must provide that the due repayments are to be made by instalments.

(7)

It is for the F2… county court to decide when the instalments are to be made.

(8)

But the F2… county court is to determine the amount of the instalments in accordance with repayment regulations.

(9)

Repayment regulations are regulations which make provision for instalments to be determined by reference to the debtor’s surplus income.

(10)

The repayment requirement may provide that the due repayments are to be made by other means (including by one or more lump sums) in addition to the instalments required in accordance with subsection (6).

(11)

The repayment requirement may include provision in addition to any that is required or permitted by this section.

(12)

In this section—

“declared debt” has the same meaning as in section 112C (and for this purpose it does not matter whether a declared debt is scheduled to the administration order when it is made, or afterwards);

“due repayments” means repayments which the repayment requirement requires the debtor to make;

“new debt” has the same meaning as in section 112D.

112FPresentation of bankruptcy petition

(1)

An administration order must, during the currency of the order, impose the following requirement.

(2)

The requirement is that no qualifying creditor of the debtor is to present a bankruptcy petition against the debtor in respect of a qualifying debt, unless the creditor has the permission of the F2… county court.

(3)

The F2… county court may give permission for the purposes of subsection (2) subject to such conditions as it thinks fit.

112GRemedies other than bankruptcy

(1)

An administration order must, during the currency of the order, impose the following requirement.

(2)

The requirement is that no qualifying creditor of the debtor is to pursue any remedy for the recovery of a qualifying debt unless—

(a)

regulations under subsection (3) provide otherwise, or

(b)

the creditor has the permission of the F2… county court.

(3)

Regulations may specify classes of debt which are exempted (or exempted for specified purposes) from the restriction imposed by subsection (2).

(4)

The F2… county court may give permission for the purposes of subsection (2)(b) subject to such conditions as it thinks fit.

(5)

This section does not have any effect in relation to bankruptcy proceedings.

112HCharging of interest etc

(1)

An administration order must, during the currency of the order, impose the following requirement.

(2)

The requirement is that no creditor under a scheduled debt is to charge any sum by way of interest, fee or other charge in respect of that debt.

112IStopping supplies of gas or electricity

(1)

An administration order must, during the currency of the order, impose the requirement in subsection (3).

(2)

In relation to that requirement, a domestic utility creditor is any person who—

(a)

provides the debtor with a supply of mains gas or mains electricity for the debtor’s own domestic purposes, and

(b)

is a creditor under a qualifying debt that relates to the provision of that supply.

(3)

The requirement is that no domestic utility creditor is to stop the supply of gas or electricity, or the supply of any associated services, except in the cases in subsections (4) to (6).

(4)

The first case is where the reason for stopping a supply relates to the non-payment by the debtor of charges incurred in connection with that supply after the making of the administration order.

(5)

The second case is where the reason for stopping a supply is unconnected with the non-payment by the debtor of any charges incurred in connection with—

(a)

that supply, or

(b)

any other supply of mains gas or mains electricity, or of associated services, that is provided by the domestic utility creditor.

(6)

The third case is where the F2… county court gives permission to stop a supply.

(7)

The F2… county court may give permission for the purposes of subsection (6) subject to such conditions as it thinks fit.

(8)

A supply of mains gas is a supply of the kind mentioned in section 5(1)(b) of the Gas Act 1986.

(9)

A supply of mains electricity is a supply of the kind mentioned in section 4(1)(c) of the Electricity Act 1989.

Making an order

112JApplication for an order

(1)

F1The county court may make an administration order only on the application of the debtor.

(2)

The debtor may make an application for an administration order whether or not a judgment has been obtained against him in respect of any of his debts.

112KDuration

(1)

F1The county court may, at the time it makes an administration order, specify a day on which the order will cease to have effect.

(2)

The court may not specify a day which falls after the last day of the maximum permitted period.

(3)

If the court specifies a day under this section, the order ceases to have effect on that day.

(4)

If the court does not specify a day under this section, the order ceases to have effect at the end of the maximum permitted period.

(5)

The maximum permitted period is the period of five years beginning with the day on which the order is made.

(6)

This section is subject to—

(a)

section 112S (variation of duration);

(b)

section 112W (effect of revocation).

(7)

This section is also subject to the following (effect of enforcement restriction order or debt relief order on administration order)—

(a)

section 117I of this Act;

(b)

section 251F of the Insolvency Act 1986.

Effects of order

112LEffect on other debt management arrangements

(1)

This section applies if—

(a)

an administration order is made, and

(b)

immediately before the order is made, other debt management arrangements are in force in respect of the debtor.

(2)

The other debt management arrangements cease to be in force when the administration order is made.

(3)

If the F2… county court is aware of the other debt management arrangements, the court must give the relevant authority notice that the order has been made.

(4)

In a case where the F2… county court is aware of other debt management arrangements at the time it makes the order, it must give the notice as soon as practicable after making the order.

(5)

In a case where the F2… county court becomes aware of those arrangements after it makes the order, it must give the notice as soon as practicable after becoming aware of them.

(6)

“Other debt management arrangements” means any of the following—

(a)

an enforcement restriction order under Part 6A of this Act;

(b)

a debt relief order under Part 7A of the Insolvency Act 1986;

(c)

a debt repayment plan arranged in accordance with a debt management scheme that is approved under Chapter 4 of Part 5 of the Tribunals, Courts and Enforcement Act 2007.

(7)

“The relevant authority” means—

(a)

in relation to an enforcement restriction order: the F2… county court F3…;

(b)

in relation to a debt relief order: the official receiver;

(c)

in relation to a debt repayment plan: the operator of the debt management scheme in accordance with which the plan is arranged.

(8)

For the purposes of this section a debt relief order is “in force” if the moratorium applicable to the order under section 251H of the Insolvency Act 1986 has not yet ended.

112MDuty to provide information

(1)

This section applies if, and for as long as, an administration order has effect in respect of a debtor.

(2)

The debtor must, at the prescribed times, provide the F2… county court with particulars of his—

(a)

earnings,

(b)

income,

(c)

assets, and

(d)

outgoings.

(3)

The debtor must provide particulars of those matters—

(a)

as the matters are at the time the particulars are provided, and

(b)

as the debtor expects the matters to be at such times in the future as are prescribed.

(4)

If the debtor intends to dispose of any of his property he must, within the prescribed period, provide the F2… county court with particulars of the following matters—

(a)

the property he intends to dispose of;

(b)

the consideration (if any) he expects will be given for the disposal;

(c)

such other matters as may be prescribed;

(d)

such other matters as the court may specify.

(5)

But subsection (4) does not apply if the disposal is of—

(a)

goods that are exempt goods for the purposes of Schedule 12 to the Tribunals, Courts and Enforcement Act 2007,

(b)

goods that are protected under any other enactment from being taken control of under that Schedule, or

(c)

prescribed property.

(6)

The duty under subsection (4) to provide the F2… county court with particulars of a proposed disposal of property applies whether the debtor is the sole owner, or one of several owners, of the property.

(7)

In any provision of this section “prescribed” means prescribed in regulations for the purposes of that provision.

112NOffence if information not provided

(1)

A person commits an offence if he fails to comply with—

(a)

section 112M(2) and (3), or

(b)

section 112M(4).

(2)

A person who commits an offence under subsection (1) may be ordered by a judge of the F2… county court to pay a fine of not more than £250 or to be imprisoned for not more than 14 days.

(3)

Where under subsection (2) a person is ordered to be imprisoned by a judge of the F2… county court, F4a judge of the county court may at any time—

(a)

revoke the order, and

(b)

if the person is already in custody, order his discharge.

(4)

Section 129 of this Act (enforcement of fines) applies to payment of a fine imposed under subsection (2).

(5)

For the purposes of section 13 of the Administration of Justice Act 1960 (appeal in cases of contempt of court), subsection (2) is to be treated as an enactment enabling a county court to deal with an offence under subsection (1) as if it were a contempt of court.

F5(6)

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112OExisting county court proceedings to be stayed

(1)

This section applies if these conditions are met—

(a)

an administration order is made;

(b)

proceedings in F6the county court (other than bankruptcy proceedings) are pending against the debtor in respect of a qualifying debt;

(c)

by virtue of a requirement included in the order by virtue of section 112G, the creditor under the qualifying debt is not entitled to continue the proceedings in respect of the debt;

(d)

the county court receives notice of the administration order.

(2)

The county court must stay the proceedings.

(3)

The court may allow costs already incurred by the creditor.

(4)

If the court allows such costs, it may on application or of its motion add them—

(a)

to the debt, or

(b)

if the debt is a scheduled debt, to the amount scheduled to the order in respect of the debt.

(5)

But the court may not add the costs under subsection (4)(b) if the court is under a duty under section 112U(6)(b) to revoke the order because the total amount of the debtor’s qualifying debts (including the costs) is more than the prescribed maximum.

112PAppropriation of money paid

(1)

Money paid into court under an administration order is to be appropriated—

(a)

first in satisfaction of any relevant court fees, and

(b)

then in liquidation of debts.

(2)

Relevant court fees are any fees under an order made under section 92 of the Courts Act 2003 which are payable by the debtor in respect of the administration order.

112QDischarge from debts

(1)

If the debtor repays a scheduled debt to the extent provided for by the administration order, the F2… county court must—

(a)

order that the debtor is discharged from the debt, and

(b)

de-schedule the debt.

(2)

If the debtor repays all of the scheduled debts to the extent provided for by the administration order, the F2… county court must revoke the order.

(3)

Subsections (1) and (2) apply to all scheduled debts, including any which, under the administration order, are to be repaid other than to their full extent.

Variation

112RVariation

(1)

The F2… county court may vary an administration order.

(2)

The power under this section is exercisable—

(a)

on the application of the debtor;

(b)

on the application of a qualifying creditor;

(c)

of the court’s own motion.

112SVariation of duration

(1)

The power under section 112R includes power to vary an administration order so as to specify a day, or (if a day has already been specified under section 112K or this subsection) a different day, on which the order will cease to have effect.

(2)

But the new termination day must fall on or before the last day of the maximum permitted period.

(3)

If the F2… county court varies an administration under subsection (1), the order ceases to have effect on the new termination day.

(4)

In this section—

(a)

“new termination day” means the day on which the order will cease to have effect in accordance with the variation under subsection (1);

(b)

“maximum permitted period” means the period of five years beginning with the day on which the order was originally made.

(5)

This section is subject to section 112W (effect of revocation).

112TDe-scheduling debts

(1)

The power under section 112R includes power to vary an administration order by de-scheduling a debt.

(2)

But the debt may be de-scheduled only if it appears to the F2… county court that it is just and equitable to do so.

Revocation

112UDuty to revoke order

(1)

The F2… county court must revoke an administration order in either of these cases—

(a)

where it becomes apparent that, at the time the order was made, the condition in subsection 112B(2) was not met (debtor in fact did not have two or more qualifying debts);

(b)

where the debtor is no longer a debtor under any qualifying debts.

(2)

The F2… county court must revoke an administration order in either of these cases—

(a)

where it becomes apparent that, at the time the order was made, the condition in subsection 112B(3) was not met (debtor in fact had business debt), and he is still a debtor under the business debt, or any of the business debts, in question;

(b)

where the debtor subsequently becomes a debtor under a business debt, and he is still a debtor under that debt.

(3)

The F2… county court must revoke an administration order where it becomes apparent that, at the time the order was made, the condition in section 112B(4) was not met (debtor in fact excluded under AO, voluntary arrangement or bankruptcy exclusion).

(4)

The F2… county court must revoke an administration order where, after the order is made—

(a)

the debtor becomes excluded under the voluntary arrangement exclusion, or

(b)

a bankruptcy order is made against the debtor, and is still in force.

(5)

The F2… county court must revoke an administration order in either of these cases—

(a)

where it becomes apparent that, at the time the order was made, the condition in section 112B(5) was not met (debtor in fact able to pay qualifying debts);

(b)

where the debtor is now able to pay all of his qualifying debts.

(6)

The F2… county court must revoke an administration order in either of these cases—

(a)

where it becomes apparent that, at the time the order was made, the condition in section 112B(6) was not met (debtor’s qualifying debts in fact more than prescribed maximum);

(b)

where the total amount of the debtor’s qualifying debts is now more than the prescribed maximum.

(7)

The F2… county court must revoke an administration order in either of these cases—

(a)

where it becomes apparent that, at the time the order was made, the condition in section 112B(7) was not met (debtor’s surplus income in fact less than, or the same as, the prescribed minimum);

(b)

where the debtor’s surplus income is now less than, or the same as, the prescribed minimum.

112VPower to revoke order

(1)

The F2… county court may revoke an administration order in any case where there is no duty under this Part to revoke it.

(2)

The power of revocation under this section may, in particular, be exercised in any of the following cases—

(a)

where the debtor has failed to make two payments (whether consecutive or not) required by the order;

(b)

where the debtor has failed to provide the F2… county court with the particulars required by—

(i)

section 112M(2) and (3), or

(ii)

section 112M(4).

(3)

The power of revocation under this section is exercisable—

(a)

on the application of the debtor;

(b)

on the application of a qualifying creditor;

(c)

of the court’s own motion.

112WEffect of revocation

(1)

This section applies if, under any duty or power in this Part, the F2… county court revokes an administration order.

(2)

The order ceases to have effect in accordance with the terms of the revocation.

Notification of certain events

112XNotice when order made, varied, revoked etc

(1)

If a notifiable event occurs in relation to an administration order, the F2… county court must send notice of the event to the creditor under every scheduled debt.

(2)

There is a notifiable event in any of the following cases—

(a)

when the administration order is made;

(b)

when a debt is scheduled to the administration order at any time after the making of the order;

(c)

when the administration order is varied;

(d)

when the administration order is revoked;

(e)

when the F2… county court is given notice under any of the provisions listed in section 112K(7)
(effect of enforcement restriction order or debt relief order on administration order).

Total amount of qualifying debts not properly calculated

112YFailure to take account of all qualifying debts

(1)

This section applies if—

(a)

an administration order has been made, but

(b)

it becomes apparent that the total amount of the debtor’s qualifying debts was not properly calculated for the purposes of section 112B(6), because of an undeclared debt.

(2)

A debt is undeclared if it ought to have been, but was not, taken into account in the calculation for the purposes of section 112B(6).

(3)

If these conditions are met—

(a)

the undeclared debt is due (whether it became due before or after the making of the order);

(b)

the total debt is less than, or the same as, the prescribed maximum;

the F2… county court must schedule the undeclared debt to the order.

(4)

If these conditions are met—

(a)

the undeclared debt is not due;

(b)

the total debt is less than, or the same as, the prescribed maximum;

the F2… county court must schedule the undeclared debt to the order when the debt becomes due.

(5)

If the total debt is more than the prescribed maximum, the F2… county court must revoke the administration order (whether or not the undeclared debt is due).

(6)

In this section “total debt” means the total amount of the debtor’s qualifying debts (including the undeclared debt).

(7)

Subsections (3) and (4) are subject to section 112AG(5).

Interpretation

112ZIntroduction

Sections 112AA to 112AH apply for the purposes of this Part.

112AAMain definitions

(1)

In this Part—

“administration order” has the meaning given by section 112A;

“debtor” has the meaning given by section 112B;

“prescribed maximum” means the amount prescribed in regulations for the purposes of section 112B(6);

“prescribed minimum” means the amount prescribed in regulations for the purposes of section 112B(7);

“qualifying creditor” means a creditor under a qualifying debt.

(2)

References to the currency of an administration order are references to the period which—

(a)

begins when the order first has effect, and

(b)

ends when the order ceases to have effect.

F7(3)

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F7(4)

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112ABExpressions relating to debts

(1)

All debts are qualifying debts, except for the following—

(a)

any debt secured against an asset;

(b)

any debt of a description specified in regulations.

(2)

A business debt is any debt (whether or not a qualifying debt) which is incurred by a person in the course of a business.

(3)

Only debts that have already arisen are included in references to debts; and accordingly such references do not include any debt that will arise only on the happening of some future contingency.

112ACInability to pay debts

(1)

In a case where an individual is the debtor under a debt that is repayable by a single payment, the debtor is to be regarded as unable to pay the debt only if—

(a)

the debt has become due,

(b)

the debtor has failed to make the single payment, and

(c)

the debtor is unable to make that payment.

(2)

In a case where an individual is the debtor under a debt that is repayable by a number of payments, the debtor is to be regarded as unable to pay the debt only if—

(a)

the debt has become due,

(b)

the debtor has failed to make one or more of the payments, and

(c)

the debtor is unable to make all of the missed payments.

112ADCalculating the debtor’s qualifying debts

(1)

The total amount of a debtor’s qualifying debts is to be calculated in accordance with subsections (2) and (3).

(2)

All of the debtor’s qualifying debts which have arisen before the calculation must be taken into account (whether or not the debts are already due at the time of the calculation).

(3)

Regulations must make further provision about how the total amount of a debtor’s qualifying debts is to be calculated.

(4)

Regulations may make provision about how the amount of any particular qualifying debt is to be calculated.

(5)

That includes the calculation of the amount of a debt for these purposes—

(a)

calculating the total amount of the debtor’s qualifying debts;

(b)

scheduling the debt to an administration order.

112AECalculating the debtor’s surplus income

(1)

The debtor’s surplus income is to be calculated in accordance with regulations.

(2)

Regulations under this section must, in particular, make the following provision—

(a)

provision about what is surplus income;

(b)

provision about the period by reference to which the debtor’s surplus income is to be calculated.

(3)

Regulations under this section may, in particular, provide for the debtor’s assets to be taken account of when calculating his surplus income.

112AFDebts becoming due

(1)

A debt that is repayable by a single payment becomes due when the time for making that payment is reached.

(2)

A debt that is repayable by a number of payments becomes due when the time for making the first of the payments is reached.

112AGScheduling and de-scheduling debts

(1)

A debt is scheduled to an administration order if the relevant information is included in a schedule to the order.

(2)

A debt is de-scheduled if the relevant information is removed from a schedule in which it was included as mentioned in subsection (1).

(3)

In relation to a debt, the relevant information is—

(a)

the amount of the debt, and

(b)

the name of the creditor under the debt.

(4)

A scheduled debt is a debt that is scheduled to an administration order.

(5)

The F2… county court must not schedule a debt to an administration order unless the court has had regard to any representations made by any person about why the debt should not be scheduled.

(6)

But subsection (5) does not apply to any representations which are made by the debtor in relation to the scheduling of a debt under section 112Y.

(7)

The F2… county court must not de-schedule a debt unless the court has had regard to any representations made by any person about why the debt should not be de-scheduled.

(8)

But subsection (7) does not apply in relation to the de-scheduling of a debt under section 112Q.

(9)

A court must not schedule a debt to an administration order, or de-schedule a debt, except in accordance with the provisions of this Part.

112AHThe AO, voluntary arrangement and bankruptcy exclusions

(1)

The debtor is excluded under the AO exclusion if—

(a)

an administration order currently has effect in respect of him, or

(b)

an administration order has previously had effect in respect of him, and the period of 12 months — beginning with the day when that order ceased to have effect — has yet to finish.

(2)

But in a case that falls within subsection (1)(b), the debtor is not excluded under the AO exclusion if the previous administration order—

(a)

ceased to have effect in accordance with any of the provisions listed in section 112K(7)
(effect of enforcement restriction order or debt relief order on administration order), or

(b)

was revoked in accordance with section 112U(1)(b)
(debtor no longer has any qualifying debts).

(3)

The debtor is excluded under the voluntary arrangement exclusion if—

(a)

an interim order under section 252 of the Insolvency Act 1986 has effect in respect of him (interim order where debtor intends to make proposal for voluntary arrangement), or

(b)

he is bound by a voluntary arrangement approved under Part 8 of the Insolvency Act 1986.

(4)

The debtor is excluded under the bankruptcy exclusion if—

(a)

a petition for a bankruptcy order to be made against him has been presented but not decided, or

(b)

he is an undischarged bankrupt.

Regulations

112AIRegulations under this Part

(1)

It is for the Lord Chancellor to make regulations under this Part.

(2)

Any power to make regulations under this Part is exercisable by statutory instrument.

(3)

A statutory instrument containing regulations under this Part is subject to annulment in pursuance of a resolution of either House of Parliament.”