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| Annual Report 2007 The Ministry of Justice Consultation Paper The IPC submitted comments and a completed questionnaire on 16 April to the Ministry of Justice consultation paper entitled Administration and Enforcement Restriction Orders. In its response the IPC suggested that the various government departments and agencies with policy responsibilities relating to personal indebtedness should work together to provide a well coordinated suite of statutory solutions, covering all distressed personal debtors at all income levels and all levels of debt; and that, in particular, the degree of overlap between the different statutory schemes should be minimised to avoid adding further complexity to an already confused marketplace. Against this background, the IPC welcomed the introduction of Debt Relief Orders (DROs) as filling an important gap in the existing range of statutory solutions. However, it remained unconvinced that there was any need for the proposed Enforcement Restriction Order. Where a debtor’s problems were genuinely temporary and likely to be resolved within twelve months, it would be reasonable to assume that the debtor and the creditors could agree to a moratorium without recourse to the courts. The IPC also remained concerned that there could be some overlap between the revised Administration Order and IVAs for debtors at or close to the £15,000 ceiling and able to afford to repay £250 per month or more. The risk of such an overlap will be increased the greater the number of types of debt which are excluded from the ambit of the Administration Order. We therefore suggested that the MoJ should monitor the effects of the revised Administration Order jointly with the Insolvency Service and, if necessary, agree on how to deal with any unnecessary overlap. We also suggested that the MoJ should, in co-ordination with the OFT and the Insolvency Service, provide clear guidance to the debt advice industry on how the new DROs and the revised Administration and Enforcement Restriction Orders are intended to work and for which type of debtors they are judged to be appropriate. |
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