Scottish and English debt laws are different, so if you are a Scottish resident and have questions on debt, then this is the place to post.

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#371883 Enormous reforms to bankruptcy legislation in Scotland have been proposed in a new bill introduced to the Scottish Parliament.

The Bankruptcy and Debt Advice (Scotland) Bill 2013 aims to ensure access to “fair and proportionate” debt management for Scottish citizens.

Provisions in the Bill include access to financial advice for every individual struggling financially, before they are placed into a statutory debt solution, and financial education for those who need it.

For creditors, the Bill will help make sure citizens who can repay their debts do so.

“This is one of the most ambitious and far-reaching reforms ever considered by both the Scottish Government and Accountant in Bankruptcy,” said Fergus Ewing, Scotland’s minister for energy, enterprise and tourism.

“The Bill provides access to fair and just processes, allowing debtors to gain control of their debt and their lives and ensures that Scotland leads the way in meeting the rights and needs of debtors and creditors.

“It is vital that people who are experiencing financial hardship have the benefit of advice on the range of options open to them. By taking advice early, many people may be able to avoid bankruptcy by reaching an agreement with their creditors.”

The Scottish government has also made changes to the Debt Arrangement Scheme – a statutory debt instrument – to allow interest and charges to be frozen at an earlier stage.

It said this was in response to the increasing number of people who find themselves trapped in a cycle of debt as a result of high interest payday loans.

Ewing added: “The Debt Arrangement Scheme (DAS) has proven to be a very successful initiative and provides a viable solution for people in debt. It is a real alternative to bankruptcy which should always be looked on as a last resort.

“The reforms provided for in this Bill ensure that our law on debt relief can deal with the challenges we face in modern society, providing appropriate solutions and protection to both those in debt and their creditors.”

Other provisions in the Bill include:

• The development of a Common Financial Tool for use by money advisers

• The development of a new ‘Minimal Asset Process’ route into bankruptcy

• Altering the process for discharge of debtors, in order that the debtor must satisfactorily co-operate with their trustee and with creditors

• Provision for AiB to review decisions before onward appeal to the Sheriff Court

• A more efficient process for e-Applications over the web

• Enabling AiB to transfer debtors between products more easily

• Improving the processes for re-opening bankruptcy cases

• Transfer of certain mainly administrative bankruptcy functions from the Sheriff Courts

• The requirement for creditors to submit claims within 120 days

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#375463 On so many levels I have reservations about this. Firstly, how many times does the Scottish Parliament need to return to the topic of bankruptcy reform?

We've had the Debt Arrangement and Attachment (Scotland) Act 2002, Bankruptcy and Diligence etc. (Scotland) Act 2007, Home Owner and Debtor Protection (Scotland) Act 2010 as well as Acts on land reform and title conditions. All this endless tinkering doesn't seem helpful.

That aside, whilst every new look at insolvency law points to 'balancing the interests of creditors and debtors' this Act seems pointed towards the interests of creditors. Whilst debt advice and financial education are worthy, vitally important in fact, the fact remains that for some people debt relief is required. In that light I find some of the proposals questionable.

E.g 'debtors who have been assessed as being able to make a contribution towards their bankruptcy, will be required to make payments throughout the ‘payment period’, the ‘payment period’ being 48 monthly payments or equivalent in weekly payments from the date of the first payment.' What's wrong with the three year period that generally applies now?

Don't even start me on the cumbersome, bureacratic proposals for a 'payment break' to fix a non-existent problem of what to do with people who can't afford a contribution from income. Currently if someone loses their job they stop paying a contribution. Why do we need a new procedure to formalise things?

Anyway, it's not all bad but I'm wondering what's it all adding?
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#390363 even so -- in England and Wales one can file for someone's bankruptcy if they just owe £750 which is iniquitous given that the cost of going bankrupt is £700!!
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