In a development that we did not have space to report upon in the last issue, the MCA was amended with effect from 1.10.12 (with transitional provisions) by paragraph 53 of Schedule 2 to the Tribunals, Courts and Enforcement Act 2007 (Consequential Amendments) Order SI 2012/2404. The material effect of the amendments is:
- to provide for a further exclusion from the category of persons eligible to be donors of lasting powers of attorney those made subject to a debt relief order under Part 7A of the Insolvency Act 1986: s.10(2).
- if P is made subject to such an order, then this will revoke an LPA so far as it relates to his property and affairs (although it will only suspend it if the order is an interim one): ss.13(3) and (4).
- likewise, the making of a debt relief order in respect of a donee of a power of attorney will terminate his appointment and revoke the power in so far as it relates to P’s property and affairs (or suspend it if the order is an interim one): ss.13(6) and (8);
References to debt relief orders within the Act also include references to debt relief restrictions orders: s.64(3A).
As explained in the Explanatory Memorandum accompanying SI 2012/2404 The Tribunals, Courts and Enforcement Act 2007 introduced debt relief orders and debt relief restrictions orders into the Insolvency Act 1986. There are strict qualifying conditions placed on a debtor before he/she can enter into a debt relief order and they include having total debts of less than £15,000, minimal assets and disposable income of less than £50 per calendar month. Once he/she has entered into a debt relief order, the debtor is subject to a number of restrictions that are similar to those imposed on persons who have entered bankruptcy.