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Debt Relief Orders effective as from the 6th April 2009.
A new tool arrived on the 6th April to assist debtors, especially those with relatively small-unsecured liabilities, very little surplus income and assets of less then £300.00.
Aimed at those individuals who are unable to pay off their unsecured debts within a reasonable time and where other avenues like bankruptcy or Individual Voluntary Arrangements, are not possible.
A DRO can be applied for where the debtor:
Unless homeowners have negative equity they are unlikely to pass the minimum criteria for a DRO. The official guide on the value of cars is that if a vehicle is worth less than £1000 it would be exempt.
The process is designed to be cheap and so an online application is necessary, not to the courts but via to the Official Receiver (OR) through an approved intermediary – at present organisations like the CAB – free Legal Centres and some fee charging debt advice services have been approved by the Secretary of State.
A fee of £90 is payable and an order can be made without any need for a court hearing providing if the criteria are met. All debts need to be disclosed and the debtor is obliged to fully assist the Official Receiver.
A DRO can be ended if the debtor does not cooperate or provide full information or misleads the adviser.
Typically for 12 months but there are restrictions during this period.
A significant difference between this and bankruptcy is that the debtor's assets do not vest in the OR. There is no provision for paying creditors.
And for the 12 months creditors cannot take any action and after that period the debtor is free from the debts.
It is possible for creditors to give evidence that the individual does not meet the criteria and the OR may consider that information and terminate the DRO.
Legal Update: 17th March 2009
Employment Law Changes from April 2009
The statutory dispute resolution procedures
The Employment Act 2008 repealed the statutory dispute resolution procedures completely and replaced these with a system based on a new ACAS Code.
Key will be the change that dismissals will not be automatically unfair for failing to comply with the ACAS Code.
Note that Tribunals can still increase or reduce compensatory payments the adjustment has to be just and equitable in all the circumstances.
There are transitional provisions that will determine whether a disciplinary or grievance procedure will be covered by the old or the new regime. In some cases the statutory dispute resolution procedures will continue to apply to grievances until October this year.
Employment Tribunal Procedures streamlined
Some new Tribunal Rules of Procedure will apply to applications for extension of time, issuing and reviewing default judgments and dismissing claims.
Statutory sick pay and maternity, paternity and adoption pay
The weekly rate of SSP will be increased to £79.15 (from £75.40) and the weekly rate of SMP, SPP and SAP will be increased to £123.06 (from £117.18).
Statutory annual holiday entitlement
Under the Working Time (Amendment) Regulations 2007, statutory annual leave will be increased to 5.6 weeks from 1 April 2009. This is equivalent to 28 days holiday for employees who work a five day week.
There is no change for time off on any Bank or public holiday and the change is intended to cover any such days which are taken.
Legal Update: 10th March 2009
Not only are issues of ‘Secret Commissions and Bribes’ appearing in the Financial dealing of lenders and brokers but even in our national game!
A football agent, Mike Berry who was employed by Imageview Management Limited was found by the Court to have acted in breach of his fiduciary duty to footballer client, Kelvin Jack, by undertaking a clandestine deal for himself when he was also obtaining a work permit for Jack to play for Dundee United FC.
Jack did not have to pay any fees to the agency and was also entitled to repayment of all the commission he had already paid and also the fees which Imageview had received for the secret deal.
Likewise any loan broker: (1) must not place himself in a position where his own interests conflict with those of the principal or where there is a real possibility that this will happen; and (2) must not profit from his position at the expense of his principal.
Jacob LJ said in the Court of Appeal
“We are here concerned not merely with damages such as those for a tort or breach of contract but with what the remedy should be when the agent has betrayed the trust reposed in him – notions of equity and conscience are brought into play. Necessarily such a betrayal may not come to light. If all the agent has to pay if and when he is found out are damages, the temptation to betray the trust reposed in him is all the greater. Therefore, the strict rule is there as a real deterrent to betrayal.”
http://www.bailii.org/ew/cases/EWCA/Civ/2009/63.html
Legal Update: 8th March 2009
From an unsecured debt to a charging order and beyond!
In the current economic situation many individuals are finding that after taking on loans or other financial liabilities their circumstances change and quickly from what was a mere credit card or maybe just an unsecured personal loan the debt liability has morphed into a County Court Judgement and ensconced uncomfortably ( cuckoo like) upon the property is a charging order with a growing interest bearing debt made by the creditor. But unlike a cuckoo that eventually leaves the nest, the charge stays and the property cannot then be sold or transferred without first clearing the charge.
The Court of Appeal in Yorkshire Bank Finance Ltd v Mulhall (Oct 2008) clarified that there is absolutely no time limit on how long a charging order can stay on a property.
The defendant had provided a personal guarantee for a company loan to Yorkshire Bank, unfortunately the company breached its terms and the Bank successfully sued. After judgment a charging order was obtained on the Defendants home.
Oddly for nearly 16 years the bank did nothing at all, eventually the Defendant applied to set aside both the judgment and charging order based on the delay and passage of time. The Defendants argument was based on s20(1) Limitation Act 1980 that provides a 12 year limitation period for an action to recover "any principal sum of money secured by a mortgage or other charge on property". Disappointingly for the Defendant the Court said that S 20(1) did not apply to the making of a charging order.
