Register of Insolvencies
The register of insolvencies is a statutory register about the insolvency of individuals and businesses in Scotland.
Main Changes for Debtors and Creditors
- A debtor who wishes to make themselves bankrupt no longer has to go to court. All debtor applications must be sent to and decided by the Accountant in Bankruptcy.
- A debtor must owe a minimum of £1,500 before they can apply for their own bankruptcy. If a creditor wishes to make a debtor bankrupt they must show to the court that the debtor owes a minimum of £3,000.
- The Court of Session no longer awards or recalls bankruptcies. All creditor petitions and recalls must be submitted to sheriff courts.
- A sheriff will be allowed to delay their decision on a creditor's petition for bankruptcy to give a debtor time to agree a payment plan that will remove the need for them to be made bankrupt.
- A new route into bankruptcy has been introduced for people on low income who do not own property and have very little in savings or other assets. This is known as Low Income Low Assets (LILA).
- The period of a debtor's bankruptcy has been reduced from three years to one. However, this can be extended if someone does not co-operate with their trustee or misbehaves whilst bankrupt. The trustee, as under the previous rules, does not get their discharge until the administration of the case is complete.
- If a debtor does not co-operate with their trustee or misbehaves before and/or during their bankruptcy, they may be made subject to a Bankruptcy Restriction Order or a Bankruptcy Restriction Undertaking (BRO/BRUs). BRO/BRUs apply restrictions to a debtor's credit and work activities for between 2 and 15 years after the BRO/BRU is granted. Details of a debtor's BRO/BRU will be recorded on the Register of Insolvencies.
- The process for obtaining contributions from a debtor's income during their bankruptcy has been formalised with the introduction of new Income Payment Agreements and Orders (IPA/IPOs). Agreements and orders will normally last for three years from the signing of the IPA/IPO.
- Student loans will not be written off through bankruptcy.
- A debtor will only be allowed to appeal the amounts declared in the accounts of their trustee if they can demonstrate they will gain financially from the outcome of the appeal.
- There are also changes to the responsibilities of the interim trustee and trustee appointed to administer the debtors' financial affairs before and during bankruptcy.