New debt law comes into force

New legislation comes into force today (Wednesday, April 1) which sees Scotland introduce one of the most modern systems of debt advice and debt management in the world.

The Bankruptcy and Debt Advice (Scotland) Act introduces a suite of measures, including the Minimal Asset Process, which offers debt relief quickly and at less than half the cost of an application for bankruptcy under the previous equivalent scheme for those on low incomes.

Accountant in Bankruptcy will oversee implementation of the new law, which has been designed to balance the rights of those in debt with the needs of creditors and businesses.

The introduction of the legislation is the latest element in the Scottish Government’s vision of a Financial Health Service for Scotland, which commenced with the launch of the Scotland’s Financial Health Service web portal in December 2014. The site is a one-stop shop for advice on a range of money issues, signposting users to organisations offering information and advice on debt, managing money, housing, homelessness and ethical lending.

Other measures as part of the new legislation include:

  • Mandatory money advice for people seeking access to statutory debt relief instruments such as sequestration (the equivalent term in Scotland for bankruptcy) to ensure debtors are matched with the solution that best fits their needs and circumstances
  • Compulsory financial education for those who have been sequestrated more than once to help with their financial rehabilitation and prevent future financial difficulties
  • Introduction of a Common Financial Tool for money advisers, allowing them to quickly assess whether individuals can contribute towards repayment of their debts and what the level of their contribution should be
  • A new web-based bankruptcy application system
  • Creditors are obliged to submit claims no later than 120 days after notification by the trustee

Business Minister Fergus Ewing said: "This new law places Scotland firmly at the forefront of efforts on how to help some of the most financially vulnerable in society.

"These measures have been developed following years of consultation with experts across the financial advice community and from studying how other nations deal with issues of personal debt.

"It is only proper that we seek to do everything we can to help financially rehabilitate families and individuals on low incomes and with little by way of assets who are struggling with debt, while still offering a fair deal for those owed money.

"Taken as a whole, this pioneering legislation seeks to bring dignity to those people in Scotland seeking to break the cycle of debt once and for all."


The Bankruptcy and Debt Advice (Scotland) Act 2014 contains a range of new powers. Details can be obtained here:

Scotland’s Financial Health Service is a one-stop shop for advice a range of money issues and signposts to organisations offering information and advice on debt, managing money, housing, homelessness and ethical lending. 

Further information regarding insolvency in Scotland, including legislation, can be found on the Accountant in Bankruptcy’s website


Gavin Cameron, Communications Manager, Accountant in Bankruptcy 0300 200 2636 / 07976 183010