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Part III · Debt Protection Moratorium Order

39. Criteria for making Debt Protection Moratorium Order

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

(1)

On receipt of a debt protection application, the court must consider whether to make a Debt Protection

Moratorium Order in relation to the debtor applicant.

(2)

In considering a debt protection application, the court may-

(a)

request that the Official Receiver make such enquiries as it considers necessary to assist the court in considering whether the debtor meets the eligibility criteria specified in subsection (4); and

(b)

stay consideration of the application until the

Official Receiver has received satisfactory answers to such enquiries.

(3)

In considering a debt protection application, the court is required to presume that the criteria in subsection (4) are met if it appears to the court to be the case at the application date, from the information supplied in the application, and the court has no reason to believe that the information supplied is incomplete or inaccurate.

(4)

A debtor will be eligible for a Debt Protection

Moratorium Order only if the debtor –

(a)

is unable, or is unlikely to be able, to pay some or all of the debts as they become due;

(b)

is resident in Sri Lanka or at any time within three years before the date of the Debt Protection

Application –

(i)

was a resident, or had a place of residence in

Sri Lanka; or

Rescue, Rehabilitation and Insolvency

(ii)

carried on business in Sri Lanka;

(c)

is not currently a bankrupt debtor;

(d)

is not subject to a Debt Restructuring Arrangement under Part IV;

(e)

has not been subject to a Debt Rehabilitation

Order under Part V within twelve months prior to the date of the Debt Protection Application;

(f)

has not been subject to a Bankruptcy Order under

Part VI within five years prior to the date of the

Debt Protection Application;

(g)

has not been subject to a Debt Protection

Moratorium Order under Part III within twelve months prior to the date of the Debt Protection

Application.

(5)

The court, having considered a debt protection application, must issue a Debt Protection Moratorium Order in relation to the debtor if it appears to the court that-

(a)

the debtor meets the eligibility criteria in subsection (4);

(b)

the court has no reason to believe that the debtor has made any material false representation or omission in making the application; and

(c)

the debts to be covered by the Debt Protection

Moratorium Order are included debts in accordance with section 37.

(6)

On the making a Debt Protection Moratorium Order, the court shall direct the Official Receiver to record in the

Personal Insolvency Register, in addition to such other details as may be prescribed -

Rescue, Rehabilitation and Insolvency

(a)

details of the debtor;

(b)

the date of issue of the Order;

(c)

the date on which the Moratorium period is due to cease;

(d)

any extension of the Moratorium period, including the date on which an extended Moratorium period is due to cease.

(7)

Having considered a debt protection application, the court must refuse an application to make a Debt Protection

Moratorium Order in relation to the debtor if the court considers that-

(a)

the debtor does not meet the eligibility criteria in subsection (4);

(b)

the debts to be covered by the Debt Protection

Moratorium Order are not included debts for the purposes of section 37; or

(c)

the debtor has made any material false representation or omission in making the application or on supplying any accompanying information.

Part IV

Debt Restructuring Arrangements

Part V

Debt Rehabilitation Orders

Part VI

Part VII

Personal Insolvency Register

Part VIII

Part IX

Part X

Compromises

Part XI

Micro Small Medium Enterprise (MSME) Company Debt Restructuring Arrangements

Part XII

Part XIII

Part XIV

Cross - Border Insolvency

Part XV

Part XVI

Part XVII

Schedules