There are some Jamaican statutes which are desperately in need of review. There are others which, although they have been reviewed, some archaic provisions have escaped the attention of our legislators. One such statute is the Bankruptcy Act which was enacted in 1880 and has been the subject of amendments as recently as 1993 and 1995.

Given the current state of the world economy, and Jamaica in particular, it is likely that the frequency with which applications for bankruptcy are made is likely to increase. The Bankruptcy Act is, therefore, likely to become more important as time elapses, as it allows the affairs of a person who is in debt (a debtor) to be wound up by him or someone to whom he is indebted. It allows the debtor an opportunity to have his affairs administered in a manner which should allow him sufficient means on which to survive while making attempts to settle his debts.

One of the most important aspects of the statute is the identification of the assets which may be taken from the debtor and held by a trustee or divided among his creditors, as well as those which may not. The latter category is a cause for concern because this is where the statute is in dire need of change.

Under section 104 of the act, the property in the debtor's possession which may not be taken are:

Property held by the debtor in trust for any other person.

Tools (if any) of his trade, and the necessary wearing apparel and bedding for himself, his wife and children to a value, inclusive of tools and apparel and bedding, not exceeding $60 in the whole.

Debtor's survival

By this provision, the tools of the debtor's trade, clothes and bedding belonging to him, his wife and children are liable to being taken and divided among his creditors. As the objects of the legislation are not to render the bankrupt incapable of surviving, it is clear that section 104 needs to be amended because $60 is an unrealistic value to be placed on items which may be withheld by the debtor to ensure his survival and that of his family.

It is likely that the failure to amend section 104 was an oversight, but it has such far-reaching implications that it begs for immediate attention.

Sherry-Ann McGregor is a partner and mediator with the firm Nunes, Scholefield, DeLeon & Co. Send feedback and questions to lawsofeve@yahoo.com or Lifestyle@gleanerjm.com.