High Court Sets Aside Protective Certificates

In two separate cases, following a challenge by a financial institution in each case, the High Court has held that it will set aside protective certificates granted to debtors in personal insolvency proceedings where there has been material non-disclosure in respect of the debtor's assets.

The Personal Insolvency Act 2012 (as amended) permits a debtor to apply to court for a protective certificate while making a proposal for a debt settlement arrangement or a personal insolvency arrangement. A protective certificate affords comprehensive protection to a debtor from his or her creditors for a period of 70 days, which period can be extended on application to court. This protection period allows breathing space for the formulation of proposals for an arrangement with creditors which would resolve his or her indebtedness.