In force2020 Revised Edition

Contents

Insolvency, Restructuring and Dissolution Act 2018 · 2020 Revised Edition · Part 17 · Administration in Bankruptcy

366. Extortionate credit transactions

(1)

This section applies where a person who is adjudged bankrupt is or has been a party to a transaction for or involving the provision to that person of credit.

(2)

The Court may, on the application of the Official Assignee, make an order with respect to the transaction if the transaction is or was extortionate and was entered into within 3 years before the commencement of the bankruptcy.

(3)

For the purposes of this section, a transaction is presumed to be extortionate, unless the contrary is proved, if, having regard to the risk accepted by the person providing the credit —

(a)

the terms of it are or were such as to require grossly exorbitant payments to be made (whether unconditionally or in certain contingencies) in respect of the provision of the credit; or

(b)

it is harsh and unconscionable or substantially unfair.

(4)

An order under this section may contain one or more of the following:

(a)

provision setting aside the whole or part of any obligation created by the transaction;

(b)

provision varying the terms of the transaction or varying the terms on which any security for the purposes of the transaction is held;

(c)

provision requiring any person who is or was party to the transaction to pay the Official Assignee any sums paid to that person;

(d)

provision requiring any person to surrender to the Official Assignee any property held by that person as security for the purposes of the transaction;

(e)

provision directing accounts to be taken between any persons.

(5)

Any sums or property required to be paid or surrendered to the Official Assignee in accordance with an order under this section are to be comprised in the bankrupt’s estate.