Personal Insolvency Act 2012

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Variation of a Personal Insolvency Arrangement.

119.— (1) Subject to this section a variation of a Personal Insolvency Arrangement shall be made in accordance with the terms of the Personal Insolvency Arrangement.

(2) The debtor’s written consent shall be required to any variation of a Personal Insolvency Arrangement provided that any unreasonable refusal by the debtor to consent to a variation shall be subject to challenge in accordance with section 120 .

(3) A debtor shall be considered to be acting reasonably where the debtor refuses to consent to a variation of a Personal Insolvency Arrangement where that variation would require the debtor—

(a) to make additional payments in excess of 50 per cent of the increase in his or her income available to him or her after the following deductions (where applicable) are made:

(i) income tax;

(ii) social insurance contributions;

(iii) payments made by him or her in respect of excluded debts;

(iv) payments made by him or her in respect of excludable debts that are not permitted debts;

(v) such other levies and charges on income as may be prescribed,

or

(b) to make a payment amounting to more than 50 per cent of the value of any property acquired by the debtor after the coming into effect of the Personal Insolvency Arrangement unless receipt of that property had been anticipated by the terms of that arrangement.

(4) In order that a variation of a Personal Insolvency Arrangement take effect, in addition to the consent in writing of the debtor referred to in subsection (2), the variation shall be approved at a creditors’ meeting where—

(a) a majority of creditors representing not less than 65 per cent of the total amount of the debtor’s debts remaining due to the creditors participating in the meeting and voting have voted in favour of the proposal,

(b) creditors representing more than 50 per cent of the value of the secured debts due to creditors who are—

(i) entitled to vote, and

(ii) have voted,

at the meeting as secured creditors have voted in favour of the proposal, and

(c) creditors representing more than 50 per cent of the amount of the unsecured debts of creditors who—

(i) are entitled to vote, and

(ii) have voted,

at the meeting as unsecured creditors have voted in favour of the proposal.

(5) Where a variation is approved in accordance with subsection (4) such variation shall, subject to the provisions of this Act, be binding on every creditor who was entitled to vote at the creditors’ meeting.

(6) The procedures and other steps to be taken by the personal insolvency practitioner and the Insolvency Service pursuant to sections 109 to 115 shall apply to the variation of a Personal Insolvency Arrangement and the reference in those sections to a Personal Insolvency Arrangement shall for the purposes of a variation of a Personal Insolvency Arrangement be construed as referring to such variation.

(7) Unless otherwise specified in the terms of a Personal Insolvency Arrangement, the debtor or any creditor may require the personal insolvency practitioner to call a creditors’ meeting under this section to consider a variation to the Personal Insolvency Arrangement on the basis that there has been a material change in the debtor’s circumstances, in particular as respects an increase or decrease in the extent of the debtor’s assets, liabilities or income, which would affect the debtor’s ability to make payments under the Personal Insolvency Arrangement.

(8) For the purposes of voting at a creditors’ meeting the voting rights of creditors shall be the same as those applying at the creditors’ meeting to consider a proposal for a Personal Insolvency Arrangement unless the debt due to the creditor concerned is considered to have been discharged under the terms of the Personal Insolvency Arrangement at the date of the calling of the creditors’ meeting to consider the variation.

(9) For the purposes of subsection (4)(b) the value of a secured debt shall be—

(a) the market value of the security concerned determined in accordance with section 105 , or

(b) the amount of the debt secured by the security on the day on which the vote takes place,

whichever is the lesser.

(10) A reference in this Chapter to a Personal Insolvency Arrangement shall be construed as including such an arrangement as varied in accordance with this section.