Proposed Personal Insolvency Bill

On 25 January 2012 the Government approved and published the heads of the proposed Personal Insolvency Bill (the "Draft Bill"). The Draft Bill proposes the introduction of three non-judicial debt settlement arrangements and a reform of the existing bankruptcy regime. The new arrangements will allow for the write down or restructuring of both secured and unsecured debt owed by certain eligible individuals. This briefing introduces the arrangements, with a focus on the proposals relating to secured debt.

There has been general agreement that change to the existing regimes for the resolution of personal insolvency has been necessary for some time and various public groups have reported on the relevant issues.¹ The Draft Bill represents the Government's proposals to implement reform in this area and is likely to be subject to considerable comment and change during the legislative process.