Tribunals, Courts and Enforcement Act 2007

Tribunals, Courts and Enforcement Act 2007

2007 CHAPTER 15

Part 5: Debt Management and Relief

Commentary on Sections: Part 5

Part 2 - Other conditions

Schedule 19: Schedule 4ZB to the Insolvency Act 1986

Section 109: Debt management schemes

578. This section defines “debt management scheme” as used in this Chapter.

579. Subsections (2) to (4) set out conditions that must be met by all schemes that are seeking approval. Schemes must apply only to individual debtors (i.e. not companies or partnerships) who do not have any debts incurred in the course of business. Schemes may be open to all such individuals or to particular categories (as defined by the particular scheme). Schemes must also allow any debtor to whom the scheme applies to ask that a DRP be arranged. Where such a request is made, the scheme operator, (or an authorised person under the scheme), must decide whether a DRP is appropriate for the debtor (in accordance with the terms of the scheme, some of which may be prescribed under section 111), and if so, arrange the plan.

580. Subsection (5) specifies that the operator of an approved scheme must be a body of persons, (for example, a company or a partnership rather than an individual). Therefore it would be possible for a body such as Citizens Advice, or an existing repayment scheme provider such as the Consumer Credit Counselling Service or Payplan, or for a private company, to operate an approved scheme. But it would not be possible for an individual to do so.