Damages for distress - included in bankruptcy?

realgonekid_2

Hi
I know i have similar questions on here regarding this, it now boils to down to the issues of whether damages for distress as awarded by a county court can be included in a BR/DRO

I have a free 30 minute advice session with an insolvency practitioner on Thursday but wonder if anyone here might be able to advise in the meantime. I realise this is not very common.

sourcrates

Hi,

Asking the same thing numerous times in different threads will not change the answer.

No one on this forum can answer your question.

You need specific legal advice on this matter, we can only give opinion, you need facts.

realgonekid_2

I have now taken proper advice and they are off the opinion it is a provable debt as per the new regulations and that it would not be excluded.

He pointed me to here:

http://www.legislation.gov.uk/uksi/2016/1024/article/14.2/made

Provable debts
14.2.—(1) All claims by creditors except as provided in this rule, are provable as debts against the company or bankrupt, whether they are present or future, certain or contingent, ascertained or sounding only in damages.

(2) The following are not provable—

(a)an obligation arising under a confiscation order made under—
(i)section 1 of the Drug Trafficking Offences Act 1986(1),
(ii)section 1 of the Criminal Justice (Scotland) Act 1987(2),
(iii)section 71 of the Criminal Justice Act 1988(3), or
(iv)Parts 2, 3 or 4 of the Proceeds of Crime Act 2002(4);
(b)an obligation arising from a payment out of the social fund under section 138(1)(b) of the Social Security Contributions and Benefits Act 1992(5) by way of crisis loan or budgeting loan.
(c)in bankruptcy—
(i)a fine imposed for an offence,
(ii)an obligation (other than an obligation to pay a lump sum or to pay costs) arising under an order made in family proceedings, or
(iii)an obligation arising under a maintenance assessment made under the Child Support Act 1991(6).
(3) In paragraph (2)(c), “fine” and “family proceedings” have the meanings given by section 281(8) (which applies the Magistrates Courts Act 1980(7) and the Matrimonial and Family Proceedings Act 1984(8)).

(4) The following claims are not provable until after all other claims of creditors have been paid in full with interest under sections 189(2) (winding up), section 328(4) (bankruptcy) and rule 14.23 (payment of interest)—

(a)a claim arising by virtue of section 382(1)(a) of the Financial Services and Markets Act 2000 (restitution orders)(9), unless it is also a claim arising by virtue of sub-paragraph (b) of that section (a person who has suffered loss etc.); or
(b)in administration and winding up, a claim which by virtue of the Act or any other enactment is a claim the payment of which in a bankruptcy, an administration or a winding up is to be postponed.
(5) Nothing in this rule prejudices any enactment or rule of law under which a particular kind of debt is not provable, whether on grounds of public policy or otherwise.

realgonekid_2

I have had some further advice from a very experienced solicitor
He stated that damages for this are certainly included in a bankruptcy order, that he said was very clear and would have no issued being included
However he said there was a "but"
Where as other debts such as credit card bills etc would be automatically wiped out in bankcrupt (after a year etc)
https://www.legislation.gov.uk/ukpga/1986/45/pdfs/ukpga_19860045_en.pdf indicates this on page 159/160 and 202/203 this is not the case with damages and it was indicated it would be up to a court to discharge this debt.

Has anyone come across this with any other debt where they have had to apply for discharge?