Debts Relief Order and Administration Order for Debtors in the United Kingdom

What Malaysian Can Learn?

  • Ruzita Azmi UUM Kuala Lumpur, Universiti Utara Malaysia
  • Adilah Abd Razak Department of Marketing and Management, Universiti Putra Malaysia
  • Siti Nur Samawati Ahmad Kolej Profesional MARA Beranang, Selangor, Malaysia
Keywords: Debtors pre-rehabilitation, debts relief, administrative order, country comparison, bankruptcy

Abstract

Debtor’s pre-rehabilitation is a measure given to a debtor in order to avoid bankruptcy once he failed to fulfil his financial commitment with his creditors. The pre-rehabilitation schemes can be obtained through court or out of court’s settlement. The most common type of pre-rehabilitation that court based in the United Kingdom (UK) is Individual Voluntary Arrangement (IVA), which usually applicable to debtors with a large number of debts. Meanwhile, for a debtor with a smaller amount of debts, and disqualified from IVA, may resort to Debts Relief Order (DRO) and Administration Order (AO). On the other hand, Malaysian debtors may only resort to Voluntary Arrangement (VA) modelled after the IVA practised in the UK to avoid bankruptcy. Considering the importance to give more options for pre- rehabilitation schemes for Malaysian debtors, this paper examines the provisions on DRO and AO in the UK. The authors collected primary and secondary data from judicial decisions, textbooks, reports and articles from both law and non-law journals. This paper concludes by showing that if Malaysia emulates the UK and introduces DRO and AO, debtors in Malaysia will have two more bankruptcy pre-rehabilitation to complement the VA.

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Published
2018-07-01
How to Cite
Azmi, R., Abd Razak, A., & Ahmad, S. N. S. (2018). Debts Relief Order and Administration Order for Debtors in the United Kingdom. Indian-Pacific Journal of Accounting and Finance, 2(3), 35-43. https://doi.org/10.32890/ipjaf.2018.2.3.60
Section
Main Section