Bankruptcy changes provide help for the most financially vulnerable

The Scottish Parliament has approved legislation that paves the way for lower cost and improved access to debt relief through bankruptcy for the most financially vulnerable. 

The Minster for Business, Fair Work and Skills, Jamie Hepburn commented: “These improvements are sensible, not only in response to the immediate economic impact of the pandemic, but also for the longer term.

“These particular reforms have been well received since their introduction on a temporary basis last year and the opportunity to place them on a permanent footing provides assurance and certainty to debt advisers and the most financially vulnerable. 

“While bankruptcy is a significant step and a final option, it can provide an important fresh start and is sometimes the only viable means to secure much needed debt relief.  I would urge anyone experiencing issues with debt or financial uncertainty to seek advice at the earliest possible stage.”

The Bankruptcy (Miscellaneous Amendments) (Scotland) Regulations 2021 will come into force on 29 March 2021 and make permanent some emergency measures that were introduced last year through the Coronavirus (Scotland) (No.2) Act 2020.

Amongst the measures included are a reduction in the application fee for self-nominated bankruptcy and removal of all fees for those in receipt of certain benefits. The legislation also provides for an increase in the debt threshold for those applying for bankruptcy through the streamlined Minimal Asset Process.  This provides access to debt relief for those with no disposable income and limited assets.

Background

Further information on the changes being introduced to bankruptcy can be found here.