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The Scottish Government’s Response to the Consultation on Bankruptcy Law Reform
The Scottish Government’s Response to the Consultation on Bankruptcy Law Reform1 November 2012
The Scottish Government today publishes a report stating how it intends to reform bankruptcy legislation to ensure that it is fit for the 21st century.
The response outlines a range of reforms that will be taken forward to be included in a Bill which is anticipated to be introduced to the Scottish Parliament before the 2013 summer recess.
Running from 24 February to 18 May 2012, the Consultation – ‘Bankruptcy Law Reform’ sought the views of stakeholders and the public on proposals aimed at ensuring that appropriate, proportionate, debt management and debt relief mechanisms are available to the people of Scotland to achieve the best balance between the needs of debtors and the rights of creditors.
On 28 August 2012 a report summarising the responses to the consultation was published. Initial analysis of these responses indicated that not all of the proposals in the consultation would be taken forward.
Proposals in the consultation that will be taken forward include ensuring that individuals and organisations get access to money advice prior to applying for debt management or debt relief solutions and the creation of a single Common Financial Tool to be used throughout Scotland. This tool will, where applicable, determine a sustainable contribution to be paid by the individual in their debt solution.
The proposed changes also look to provide support and rehabilitation for individuals and organisations in relation to their financial pressures.
Minister for Energy, Enterprise and Tourism, Fergus Ewing, who has responsibility for personal debt and insolvency in Scotland said:
“Ensuring that the people of Scotland have access to the appropriate debt management and relief mechanisms is a key priority of the Scottish Government. The recent economic crisis has impacted on many people and this has underlined the need for strong Government intervention.”
“The Scottish Government’s vision is of a Financial Health Service through which people have access to fair and just processes of debt management and debt relief. This service will support the principle that those who can pay their debts should pay, while recognising the wide range of circumstances that contribute towards financial difficulties for individuals. Our aim is to secure the best return for creditors, ensuring that the rights and needs of those in debt are balanced with the needs of creditors and businesses.”
“I am grateful to all those who took the time to contribute to the consultation, those responses will assist us in developing debt solutions that will place Scotland as a world leader in this field.”
- The concept of developing a ‘Financial Health Service’ was first discussed with stakeholders at an event held by Accountant in Bankruptcy in October 2011. There was general agreement to the concept and positive responses from those attending.
- The ‘Bankruptcy Law Reform’ public consultation ran from 24 February 2012 until 18 May 2012 and received a total of 129 responses. It set out proposals for significant reforms to Scottish Bankruptcy legislation. It described a Vision for debt advice, debt management and debt relief service in Scotland, fit for the 21st Century.