The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020

JurisdictionUK Non-devolved
CitationSI 2020/1311

2020 No. 1311

Debt Management And Relief, England And Wales

The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020

Made 17th November 2020

Coming into force in accordance with regulation 1(2) to (7)

The Treasury1in exercise of the powers conferred by section 7(2), (5)(a), (5)(c), (5)(d) and (6)(a) of the Financial Guidance and Claims Act 20182make the following Regulations.

In accordance with section 7(8)(a) and (b) of that Act, a draft of this instrument has been laid before and approved by a resolution of each House of Parliament and Senedd Cymru.

In accordance with section 7(2) and (3) of that Act, the Treasury have received advice from the single financial guidance body on the establishment of a debt respite scheme and have taken that advice into account in making these Regulations.

1 General provisions

PART 1

General provisions

S-1 Citation, commencement, extent and application

Citation, commencement, extent and application

1.—(1) These Regulations may be cited as the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020.

(2) With the exception of the provisions referred to in paragraphs (3) to (7), these Regulations come into force on 4th May 2021.

(3) Sub-paragraph (b) of the definition of “lease” and the definition of “occupation contract” in regulation 2(1) come into force on the day that section 7 of the Renting Homes (Wales) Act 20163comes into force.

(4) Regulation 7(7)(k)(i) comes into force on the day that section 157 of the Renting Homes (Wales) Act 2016 comes into force.

(5) Regulation 7(7)(k)(ii) comes into force on the day that section 181 of the Renting Homes (Wales) Act 2016 comes into force.

(6) Regulation 7(7)(k)(iii) comes into force on the day that section 187 of the Renting Homes (Wales) Act 2016 comes into force.

(7) Regulation 29(1)(j) and (k) comes into force on the day that Schedule AA1 to the Mental Capacity Act 20054comes into force.

(8) These Regulations extend to England and Wales only.

(9) These Regulations apply in respect of debtors domiciled or ordinarily resident in England or Wales.

S-2 Interpretation

Interpretation

2.—(1) In these Regulations—

“additional debt” has the meaning given in regulation 15(1);

“agent” is to be construed in accordance with regulation 12(6);

“approved mental health professional” means—

(a) in relation to acting on behalf of a local social services authority whose area is in England, a person approved under section 114(1) of the Mental Health Act 19835by any local social services authority whose area is in England, and

(b) in relation to acting on behalf of a local social services authority whose area is in Wales, a person approved under that subsection by any local social services authority whose area is in Wales;

“arrears” means any sum other than capitalised mortgage arrears payable to a creditor by a debtor which has fallen due and which the debtor has not paid at the date of the application for a moratorium in breach of the agreement between the creditor and debtor or in breach of the legislation or rules under which the debtor incurred the debt or liability;

“bank holiday” means any day which is a bank holiday in England and Wales under the Banking and Financial Dealings Act 19716;

“bankruptcy petition” means a petition for a bankruptcy order made under Chapter 1 of Part 9 of the Insolvency Act 19867by one or more of an individual’s creditors;

“breathing space moratorium” means a moratorium under Part 2;

“business day” means any day except a Saturday, Sunday, bank holiday, Christmas Day or Good Friday;

“capitalised mortgage arrears” means any arrears in relation to a mortgage that have been added to the outstanding balance to be paid over the duration of the mortgage;

“care co-ordinator” means—

(a) an individual with responsibility for co-ordinating care for a person with a mental disorder, as specified in the code of practice prepared by the Secretary of State in accordance with section 118(1) of the Mental Health Act 19838, and

(b) in relation to acting on behalf of a mental health services provider, an individual appointed in accordance with section 14(1) of the Mental Health (Wales) Measure 20109;

“conditional sale agreement” means an agreement for the sale of goods under which the purchase price or part of it is payable by instalments, and the property in the goods is to remain in the seller (notwithstanding that the buyer is to be in possession of the goods) until such conditions as to the payment of instalments or otherwise as may be specified in the agreement are fulfilled;

“creditor by assignment” is to be construed in accordance with regulation 13(1);

“debt advice provider” has the meaning given in regulation 3;

“debt relief order” means an order under Part 7A of the Insolvency Act 198610;

“debt solution” means an arrangement, scheme or procedure, whether statutory or not, the aim of which is to pay, discharge or liquidate some or all of a debtor’s debts;

“debtor” means—

(a) in relation to a mental health crisis moratorium, the applicant or the person in relation to whom an application for a moratorium has been made,

(b) in relation to a breathing space moratorium, the applicant;

“enforcement action” is to be construed in accordance with regulation 7(7);

“enforcement agent” means—

(a) an individual authorised by section 63(2) of the Tribunals, Courts and Enforcement Act 200711to act as an enforcement agent, or

(b) an individual authorised in accordance with paragraph 2(1) of Schedule 7 to the Courts Act 200312to act as an enforcement officer;

“eligibility criteria” is to be construed in accordance with regulations 24(3) and 30(3);

“FSMA” means the Financial Services and Markets Act 200013;

“hire-purchase agreement” means an agreement, other than a conditional sale agreement, under which—

(a) goods are bailed or (in Scotland) hired in return for periodical payments by the person to whom they are bailed or hired, and

(b) the property in the goods will pass to that person if the terms of the agreement are complied with and one or more of the following occurs—

(i) the exercise of an option to purchase by that person,

(ii) the doing of any other specified act by any party to the agreement,

(iii) the happening of any other specified event;

“individual voluntary arrangement” means a voluntary arrangement under Part 8 of the Insolvency Act 1986;

“interest” means any interest charged by a creditor in relation to a moratorium debt;

“interim order” means an interim order under section 252(1) of the Insolvency Act 1986;

“joint debtor” means—

(a) except where sub-paragraph (b) applies, a person who is—

(i) jointly or severally liable, or

(ii) jointly and severally liable,

with a debtor for a moratorium debt;

(a) this paragraph applies where the liability referred to in sub-paragraph (a) arises solely as a result of an indemnity or guarantee provided by the person and the person has no other liability in relation to the moratorium debt;

“lease” means—

(a) a lease, under-lease or other tenancy, assignment operating as a lease or under-lease, or an agreement for such lease, under-lease tenancy, or assignment, or

(b) an occupation contract;

“mental disorder” means any disorder or disability of the mind;

“mental health crisis moratorium” means a moratorium under Part 3;

“mental health crisis treatment” is to be construed in accordance with regulation 28(2);

“mental health nurse” means a person registered in Sub-Part 1 of the Nurses’ Part of the register maintained under article 5 of the Nursing and Midwifery Order 200114and who is so registered with an entry indicating their field of practice is mental health or learning disabilities nursing;

“mental health services provider” means—

(a) the Welsh Ministers,

(b) a local health board established under section 11 of the National Health Service (Wales) Act 200615for an area which includes a principal area in Wales within the meaning of section 20 of the Local Government Act 197216,

(c) a county council in Wales, or

(d) a county borough council in Wales;

“midway review” means a review of a breathing space moratorium carried out under regulation 27(1);

“moratorium” means, unless otherwise stated, a breathing space moratorium or a mental health crisis moratorium;

“moratorium debt” is to be construed in accordance with regulation 6;

“moratorium period” means the period from the start of a moratorium to the end of the moratorium;

“nominated point of contact” means—

(a) an approved mental health professional,

(b) a care co-ordinator, or

(c) a mental health nurse,

who can provide the confirmation required in regulation 33(1);

“non-eligible debt” has the meaning given in regulation 5(4);

“occupation contract” has the meaning given in section 7 of the Renting Homes (Wales) Act 201617;

“ongoing liabilities” means any payment, other than in respect of a payment shortfall, which is due in relation to—

(a) a secured credit agreement where the obligation of the debtor to repay is secured by a mortgage on land used by the debtor as their primary residence,

(b) a lease in relation to a property used by a debtor as their primary residence,

(c) an insurance agreement,

(d) taxes, duties and national insurance contributions,

(e) local taxes to fund local authority expenditure and rates, or

(f) the supply of water, sewerage, electricity, gas, heating oil or solid fuel;

“qualifying debt” is to be construed in accordance with regulation 5;

“register” means, unless otherwise indicated in this paragraph, the register of matters relating to moratoria maintained by the Secretary of State under regulation 35(1)(b);

“representative” means—

(a) a person who has been granted—

(i) an enduring power of attorney in accordance with such of the regulations mentioned in paragraph 2 of Schedule 4 to the Mental Capacity Act 2005...

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