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Winter 2019

Content

• Plans to introduce Breathing Space for people in problem debt progressing
• Debt Relief Order milestones
• We’ve joined the fight against modern slavery
• New insolvency regime introduced for further education bodies
• We’ve joined the new Government Counter Fraud Profession
• Our email addresses have changed
• Customer service standards recognised
• PPI claims
• Tell us what you think about this newsletter

Plans to introduce Breathing Space for people in problem debt progressing

Work is underway to introduce legal protection from creditor enforcement for people in problem debt to enable them to seek advice and enter into an appropriate debt relief solution. 

The purpose behind breathing space is intended to benefit both debtors and creditors by encouraging individuals to seek debt advice earlier.

Alongside this statutory ‘Breathing Space’, statutory debt repayment plans will be introduced to provide an additional debt solution enabling people to enter into an agreement to repay their debts in an manageable way over an extended period, with legal protection (similar to the Debt Arrangement Scheme which is available in Scotland). It is intended that the two interventions will work independently of each other – a debtor could enter a breathing space but after advice subsequently choose bankruptcy, a debt relief order or individual voluntary arrangement as most suitable for them, or apply for a statutory debt repayment plan directly without first entering a breathing space.

HM Treasury recently consulted on a proposal, whereby the Insolvency Service would provide a register for people using Breathing Space and, working with the debt advice sector to act as the scheme administrator for statutory debt repayment plans, as we currently do for Debt Relief Orders which are primarily accessed through debt charities.

Debt Relief Order milestones

We’ve joined the fight against modern slavery

We’ve joined forces with some of Britain’s biggest fashion retailers and other enforcement bodies to help eradicate modern slavery from the UK textiles industry.

The Apparel and General Merchandise Public and Private Protocol commits signatories to work together to eradicate slavery and exploitation in textile supply chains. They have pledged to raise awareness to prevent worker exploitation, protect vulnerable and exploited workers and disrupt exploitative practices and help bring criminals to justice.

Along with other enforcement bodies such as Department for Work and Pensions (DWP), Employment Agency Standards inspectorate, Health and Safety Executive (HSE), HMRC and Immigration Enforcement the Insolvency Service has committed to sharing any information we obtain in our day to day activities that suggests labour abuse is taking place.

The intent is clear – to send a strong signal that the textiles sector is resolved to playing its part in discouraging labour abuse and taking action when it does occur.

New insolvency regime introduced for further education bodies

A new insolvency regime for further education bodies in England and Wales came into force on 31 January 2019. It provides legal clarity as to how a further education or sixth form college would be managed should they become insolvent, and includes a special administration regime with an objective to protect student provision for existing students at an insolvent college.

The regime:

• applies aspects of existing insolvency law to further education bodies which are further education or sixth form college corporations
• establishes a special administration regime for further education bodies, known as education administration. This has a special objective to “avoid or minimise disruption to the studies of the existing students of the further education body as a whole” in the unlikely event that a college becomes insolvent
• creates a regime for the disqualification of college governors (or those acting as governors but not formally appointed) by modifying the Company Directors Disqualification Act 1986 to apply to further education bodies.

The provisions for the insolvency regime are set out in the Technical and Further Education Act 2017, the Further Education Bodies (Insolvency) Regulations 2019 and the Education Administration Rules 2018. The Department for Education has published guidance that provides more information on the new regime.

Special administration regimes such this provide modified procedures for sectors where the application of the normal rules of insolvency are not in the interests of public policy, for example where companies run key public infrastructure. They focus the duties of insolvency office holders on objectives set by Parliament, overriding the normal duty to act in the interests of creditors – usually this means ensuring continuation of service until transfer to another supplier. Examples of sectors covered by special administration regimes include energy transmission and energy supply companies, water and sewerage companies, banks and building societies, the railway industry, and postal services.

We’ve joined the new Government Counter Fraud Profession

Our email addresses have changed

We are moving from the Government Secure Internet platform which it is being turned off and our email addresses are changing as a result. We will be removing the ‘.gsi’ extension from all our email addresses – for example messages previously sent to ‘firstname.surname@insolvency.gsi.gov.uk’ should now be sent to ‘firstname.lastname@insolvency.gov.uk.’ You should make sure to update any records you may have, such as directories, web applications or forms that use our email addresses. Messages sent to old addresses will continue to function for a limited period of time to assist with a smooth transition.

Customer service standards recognised

PPI claims

The Official Receiver is seeking to claim outstanding PPI awards available in bankruptcy estates to ensure creditors receive assets owed before the final deadline for claims on 29 August 2019. In cases where PPI insurance was taken out before a person was made bankrupt compensation claims made by the Official Receiver will be used to make payments to creditors. Deloitte LLP has been appointed to assist the Official Receiver with the submission of PPI queries to providers to establish whether any mis-sold PPI redress is due to creditors of bankrupts’ estates.

If a bankruptcy order is subsequently annulled by the court or if PPI insurance was taken out after the date of bankruptcy, the PPI is the property of the former bankrupt, who is entitled to keep any compensation awarded.

Tell us what you think about this newsletter

We’re reviewing our stakeholder engagement activity and would be grateful if you could spend a couple of minutes to tell us what you think about this newsletter in our survey.

www.gov.uk/insolvency-service