The most common insolvency procedure in Jersey is the Désastre under the terms of the Bankruptcy (Désastre) (Jersey) Law 1990. The procedure is used both for an individual or a company. A company can also proceed with the creditors winding up pursuant to the terms of the Companies (Jersey) Law 1991.
What is en désastre?
An application for a declaration en désastre under Article 3 of the Désastre Law may be made to the Royal Court by a Creditor who has a liquidated claim in excess of £1,000. A liquidated claim is essentially a claim to which there is no reasonable defence or objection. In the normal course Benest & Syvret would have obtained against the Debtor on behalf of the Creditor client before proceeding with a Désastre application.
The Désastre Law provides a definition of insolvency as being the inability by a Debtor to pay his debts as they fall due. In practice a Désastre will not be granted by the Court where the Debtor is unable to pay his debts but does not have assets which are capable of being realised. Accordingly the Creditor or Debtor will need to file an Affidavit with the Court explaining the extent of the debts and assets.
Benest & Syvret have a close working relationship with the Viscount's Department which acts to administer all bankruptcies under the Désastre Law. We regularly advise clients in their pursuit of debt recovery and submission of claims within bankruptcy proceedings.
There are other insolvency remedies in Jersey which are less commonly used. These include Remise de Biens, Cession Générale, Dégrèvement and Realisation. Such remedies sometimes provide a useful protection for a business or individual who is burdened by debt. All however have as their overriding principle fairness to the Creditors.