SANCIA Bennett-Templar, president of Jamaica Trade and Invest (JTI), has appealed for changes to be made to the Bankruptcy Act.

“We have a culture here in Jamaica where if you start a business or you get into any endeavour and you are not a success overnight you are a failure, you are looked down on. The Bankruptcy Act needs to be changed so that we are not penalising persons for trying and not making it a go at the first time,” Bennett-Templar told a meeting of the Economy and Production Committee of Parliament at Gordon House last week.

She said other economies, such as the United States, had far better systems in place to bolster persons on the brink. “They have Chapter 11 in the US where if you get into problems, you go into Chapter 11 you work it through, you come out and three four years later your business is doing well. Here in Jamaica (if) you run into problems you’re in deep trouble,” the Jamaica Trade and Invest head told the House committee.

In the United States, failing businesses under Chapter 11 of the Bankruptcy code have access to a number of mechanisms to restructure their business and can acquire financing and loans on favourable terms.

“If you look at the United States many business owners become successful on their third and fourth trial. So we really have to look at how we change this culture of this negative response to any failure in business,” Bennett-Templar said.

Opposition Committee Member Fitz Jackson, in response to Bennett-Templar’s suggestion, said the Industry, Investment and Commerce Ministry under which the JTI fell was aptly placed to agitate for the changes.

“These are things the commerce ministry has to be trumpeting to get these kinds of adjustments made. The truth is they have been mentioned for some time but we are still there,” he said.

The present Bankruptcy Act applies primarily to personal bankruptcy as only individuals file for bankruptcy as companies are placed in liquidation or receivership. Filing for bankruptcy allows the affairs of a person who is in debt to be terminated by that individual or by the person they owe. Under Jamaican law, a creditor may ask the court to declare a person or business bankrupt if a debt of not less than $3,000 is unpaid.

Currently, the property in the debtor’s possession which may not be taken include: property held by the debtor in trust for any other person, tools (if any) of his job, and the necessary clothing and bedding for the debtor and his immediate family to a value, inclusive of tools and apparel and bedding, not more than $60 in the whole.

As it relates to corporate insolvency, the 2004 Companies Act 2004 which incorporates several sections of the Bankruptcy Act is the applicable statute.