The Coronavirus (Scotland) (No.2) Bill

The Coronavirus (Scotland) (No.2) Bill was published today (Monday 11 May 2020).  The Bill will be subject to an expedited procedure and subject to Parliament’s approval, is likely to come into force by the end of the month.

Minister for Business, Fair Work and Skills, Jamie Hepburn, said:

“We are aware of the ongoing financial difficulties faced by individuals during this unpredictable time; and also recognise the restrictions placed on those administering the insolvency process and the challenges this can pose”

“I hope these additional temporary measures will help – and we will continue to look at what more might be required as we start to think about the coming months.”

The Bill includes proposals to make a number of important changes to current bankruptcy legislation, as set out below.  These are temporary changes for the period the bill is in force – initially five months, but with the possibility of extension in the same way as the first Coronavirus Act.

Minimal Asset Procedure (MAP) Bankruptcy Applications

The Bill makes a number of changes regarding MAP administration:

  • the debt ceiling is increased from £17,000 to £25,000:
  • student debt is exempted from the debt ceiling calculation; and
  • MAP application fees are removed for those whose sole income is derived from benefits, and reduced to £50 from the current £90 for all others.

Full Administration Bankruptcy

Bankruptcy applications which do not satisfy MAP criteria are subject to full administration.  Currently, the application fee in full administration bankruptcies is £200, this will be reduced  to £150.

Qualified Creditors

Creditors may petition for the sequestration of individuals / entities when owed at least £3000.  This minimum debt threshold will be increased to £10,000.

Bankruptcy Administration

Building on the provisions of the Coronavirus (Scotland) Act, the new bill makes a number of changes to expedite bankruptcy administration process:

  • the deadline for trustees to send their DCO proposals to AiB in creditor petition bankruptcies is increased from 6 to 12 weeks;
  • virtual statutory meetings of creditors are permitted;
  • all statutory forms detailed in the Bankruptcy (Scotland) Regulations can be completed with electronic signatures; and
  • bankruptcy circulars may be sent electronically with the assent of the recipient.

Registers of Scotland

The Bill also includes a provision to introduce electronic transmission of inhibitions and inhibition renewals to Registers of Scotland.  

Further information

Details of the Coronavirus (Scotland) (No.2) Bill can be found on the Scottish Parliament website here. 

We will provide a further update if and when the bill is enacted and receives royal assent. For the avoidance of doubt, the changes detailed in this article will only apply once the legislation comes into force.

If you require any more information in the meantime, please send an email to aib@aib.gov.uk.

AiB has a dedicated page on our website specific to emergency protocols and updates during the COVID-19 pandemic. It is advisable to check our website regularly for any updates, or sign up here to register to be notified whenever we publish new information.