Jersey has one of the strictest residency criteria’s in the world. In short if you are not a national and wish to acquire residence in Jersey, you have to be wealthy. As a result, you’d think debt recovery from a Jersey resident would be simple.
Applicants are required to purchase a substantial property normally well in excess of £1 million.
So what has this go to do with debt collection? Recently a debtor from Jersey of a Master Club member was pleading financial hardship.
I very nearly believed him until the Master Club member explained that he suspects the debtor is a millionaire because he would have to be so in order to live in Jersey.
It wasn’t even a large debt, £3600, but even more puzzling was the fact that it had been outstanding for over a year.
Debt Collection in Jersey – a Case Study
Debt recovery from a customer in Jersey is possible, even if you aren’t living there.
Know Your Customer
I have preached in other blogs how important it is to know your customer, this is a perfect example of how by knowing your customer you can be assertive when they try to mislead you.
Know the Law Applicable to Jersey (or any Relevant Jurisdiction the Debtor is From)
When talking to the debtor, he had a confidence about him that suggested he thought because Master Collections is not a local agency, we would not know how to enforce the debt in Jersey.
All that did was encourage me to research how to make an individual in Jersey bankrupt.
At this point, I didn’t care for court proceedings, I wanted to let him know the Master Club member was prepared to make him bankrupt with the result of his prized possessions transferring to a Viscount the Jersey equivalent of a Trustee in Bankruptcy.
Bankruptcy in Jersey
The bankruptcy process in Jersey is similar to that in England and Wales with subtle differences.
For example, in England and Wales the starting point is whether a debtor owes a creditor £750 or more and demonstrates that they cannot settle invoices as and when they fall due.
Whereas in Jersey the starting point is whether a debtor owes a creditor £3,000 or more and demonstrates to the Royal Court on the basis of the cash flow test that the debtor is insolvent.
Like England and Wales the cash flow test considers amongst other things whether the debtor can settle invoices as and when they fall due.
In the present case not only could I demonstrate that the debtor could not settle invoices as and when they fall due but also because of comments he made in an e-mail to me I could demonstrate that he was insolvent.
However, the biggest difference is satisfying the Royal Court that the debtor has realisable immoveable property which is not a consideration in England and Wales.
In the present case I could demonstrate that the debtor has realisable immoveable property because he owned the house he lived in.
Accordingly I warned the debtor that on the basis that he is insolvent, the debt owed is above £3,000 and he has realisable immoveable property in Jersey unless he pay £3,600 within 48 hours I would make an application to The Royal Court for a declaration en désastre (bankruptcy).
Sure enough the debtor did pay in 48 hours. I then discovered as suspected that he was a millionaire with all kinds of property and possessions including a Yacht.
The moral to the story is know your customer and the applicable law relevant to their jurisdiction because if they chose not to pay or try to mislead you about their wealth you’ll know what buttons to press.
Carlo Pegna LL.B (Hons), F.Inst.L.Ex, MICM
If you have a debtor in Jersey or wish to discuss the content of this blog call me on 01920 481467.