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Enterprise Act 2002
From Wikipedia, the free encyclopedia
The Enterprise Act 2002 is an Act of the Parliament of the United Kingdom which changes the law governing bankruptcy.
Since the 1 April 2004 there have been considerable changes to the laws concerning bankruptcy in England. Previously, bankruptcy would typically last for a period of between 2 and 3 years, but now the majority of bankruptcies will be discharged after only 12 months.
The law was changed to give those with genuine cases of financial hardship the opportunity to be free of their indebtedness.
For those who have tried, unsuccessfully, to resolve their financial difficulties, the new laws allow them to petition for their own bankruptcy and start again.
Additional changes also mean that there are harsher restrictions for those who have previously been made bankrupt and those who have been through criminal bankruptcy.
If an individual had previously been an undischarged bankrupt during the 15 years before the current bankruptcy (unless the previous bankruptcy was annulled) they will be automatically discharged on 1 April 2009.
A bankrupt may ask the court for a discharge 5 years after the date of the bankruptcy order, but the court can refuse or delay the discharge, or grant it conditionally on terms requiring you to make some payments out of the individuals income.
A person can however become free from bankruptcy immediately if the court annuls (cancels) the bankruptcy order; this normally happens when the debts (including any fees and expenses of the bankruptcy proceedings) have been paid in full or if the bankruptcy order was made in error.
Alternatively, if a person has failed to carry out their responsibilities under the bankruptcy proceedings, the Official Receiver could apply to the court to delay the discharge from bankruptcy. If the court is in agreement, the bankruptcy order can only end when the suspension has been lifted and the time remaining on the bankruptcy period has run out.
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There is now a limit of 3 years, during which the Official Receiver must deal with all of the debtors assets, including the bankrupts interests in any properties.
If the Official Receiver fails to realize the assets during this time, they will be exempt from the estate in bankruptcy.
Where it is believed that the debtor has brought about the bankruptcy through their own irresponsible or imprudent conduct, there are now more severe consequences.
If this is the case, the Official Receiver can apply for a Bankruptcy Restriction Order, which may be applicable for between 2 and 15 years, in addition to the normal length of discharge.
Examples of such situations:
Failure to produce or retain records; Incurring debts as a result of gambling; Incurring debts that have arisen as a result of precarious or risky conjecture.
Additionally, the cost to an individual that wishes to petition for their own bankruptcy has risen from £460 to £475 as of April 1st 2006
Enterprise Act 2002 [1]