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As enacted
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Part IV · Debt Restructuring Arrangements

47. Debt Restructuring Arrangements: Mandatory Provisions

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

(1)

A Debt Restructuring Arrangement must authorise a person, firm, or body to act as a personal insolvency administrator in relation to the arrangement.

(2)

A Debt Restructuring Arrangement may authorise or require the personal insolvency administrator to —

(a)

carry on the debtor’s business, or trade on the debtor’s behalf or in the debtor’s name;

(b)

realise the assets of the debtor; or

(c)

collect, administer or distribute any funds of the debtor.

Rescue, Rehabilitation and Insolvency

(3)

A Debt Restructuring Arrangement shall not provide for the debtor to make payments under the arrangement, in respect of included debts, for a period of a longer duration than —

(a)

three years; or

(b)

if the amount of the debtor’s included debts exceeds Ten million rupees, seven years.

(4)

A Debt Restructuring Arrangement shall provide for the payment, before any other debts are paid, of the fees and expenses of the personal insolvency proposer and personal insolvency administrator, that are properly incurred in respect of the Arrangement.

(5)

For the purposes of subsection (4) and the Fourth

Schedule the charges incurred by a personal insolvency proposer or a personal insolvency administrator for the supply of an essential good or service, are an expense of the

Arrangement.

(6)

A Debt Restructuring Arrangement shall not require the debtor to sell or dispose off any protected property as specified in section 34.

(7)

In accordance with section 36, a Debt Restructuring

Arrangement-

(a)

shall provide for a debtor to retain sufficient income necessary for meeting the reasonable needs of the debtor and the debtors’ dependants;

and

(b)

shall not require the debtor to make payments from the debtor’s protected income.

(8)

A Debt Restructuring Arrangement shall provide for the circumstances relating to the debtor be reviewed by the

Rescue, Rehabilitation and Insolvency personal insolvency administrator at regular intervals, not exceeding intervals of twelve months.

(9)

Notwithstanding subsection (3), a Debt Restructuring

Arrangement may provide for the continuance of payments, after the completion of the Arrangement under section 60 on any debt on which the last payment is due, under the original terms of the debt, after the time of completion of the Arrangement under section 60.

(10)

A Debt Restructuring Arrangement shall not provide for a preferential claim to be paid otherwise than in priority to-

(a)

a preferential claim ranking behind that preferential claim; or

(b)

a claim that is not a preferential claim, unless the holder of the preferential claim gives consent in writing to a different treatment of such claim.

Read on from s 48

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