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Part III · Debt Protection Moratorium Order

43. Creditor Objection to Debt Protection Moratorium

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

(1)

A creditor who receives notification of a Debt

Protection Moratorium under this Part may apply to the court to object to the Moratorium.

(2)

A creditor’s application to object to a Debt Protection

Moratorium under subsection (1) shall be based on one or more of the following grounds, namely that-

(a)

the debtor does not meet the eligibility criteria in section 39;

(b)

the debts to be covered by the Debt Protection

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

(c)

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

Rescue, Rehabilitation and Insolvency

(d)

the debtor has failed, in a material manner, to comply with the obligations specified in section 32; or

(e)

the Debt Protection Moratorium Order causes irreparable harm to the interests of the creditor.

(3)

A creditor’s application to court to object to a Debt

Protection Moratorium must be made within a period of ninety days beginning on the day on which the Debt

Protection Moratorium commences.

(4)

A creditor must provide notice to the debtor of an application to object to a Debt Protection Moratorium, including the grounds on which the application is based.

(5)

Where on an application under this section the court is satisfied as to any of the grounds specified in subsection (2), the court may order either or both of the following, namely : -

(a)

make an order directing that the Debt Protection

Moratorium shall not apply in whole or in part to the creditor who made the application to court, where in doing so it would not unfairly prejudice any other creditor;

(b)

make an order cancelling the Debt Protection

Moratorium in respect of any other debtor or creditor to which the Moratorium applies.

(6)

Where a court has made an order under subsection (5), the court may require the debtor to pay any interest, fees or charges that accrued during the Moratorium period in respect of a debt to which the Moratorium applies.

(7)

In any case where a court makes an order under subsections (5) or (6), the court shall give written notice to the debtor, the Official Receiver, and any creditors to whom the order under subsection (5) applies.

Rescue, Rehabilitation and Insolvency

(8)

Where a court gives written notice to the Official

Receiver under subsection (7), the Official Receiver shall, within a period of fourteen days-

(a)

cause an entry to be made in the Personal

Insolvency Register; and

(b)

send a notification of the court order made under subsection (5), and any requirements made under subsection (6), to any affected creditor.

Part IV

Debt Restructuring Arrangements

Read on from Part IV

Part V

Debt Rehabilitation Orders

Read on from Part V

Part VI

Read on from Part VI

Part VII

Personal Insolvency Register

Read on from Part VII

Part VIII

Read on from Part VIII

Part IX

Read on from Part IX

Part X

Compromises

Read on from Part X

Part XI

Micro Small Medium Enterprise (MSME) Company Debt Restructuring Arrangements

Read on from Part XI

Part XII

Read on from Part XII

Part XIII

Read on from Part XIII

Part XIV

Cross - Border Insolvency

Read on from Part XIV

Part XV

Read on from Part XV

Part XVI

Read on from Part XVI

Part XVII

Read on from Part XVII

Schedules