A new Bankruptcy and Debt Advice Bill is being introduced by the Scottish Parliament which is designed to bring a new balance of fairness to both debtors and creditors for formal debt solutions. The first stage of the Bill is expected to be completed by the end of this year (2013)
The Bill has been constructed to transform and update the management of debt and formal debt solutions in Scotland. It takes account of recent changes in the economy and the credit industry and looks to improve the management of debt problems and solutions for all.
The Bill’s key objectives
The Bill has at its core, three main objectives designed to facilitate the debt management process and strike what it terms a fairer balance between the interests of debtors and creditors.
These objectives are:
- To ensure there is a fair and reasonable process for people experiencing debt problems to gain access to debt advice and appropriate debt relief solutions.
- To ensure people who can pay their debts do so and there are new procedures and controls to enable this.
- To ensure that creditors get the best return on what they are owed by striking a new balance between the interests of the debtor and creditor in all instances.
The Bill provides provision for improving the debt advice and information to be made available to those experiencing debt problems and even goes further by introducing the concept of mandatory education, for example, for people who have been made bankrupt more than once.
A more efficient and streamlined process
Part of the Bill has focussed on the processes involved in the initial and on-going administration of the various formal debt solutions available to people with debt problems. Application processes have been improved and the Accountant in Bankruptcy (AIB) has taken on increased responsibilities and now administers much of the process.
The AIB also has increased responsibility and power to review decisions before appeal to the Sheriff Court, is now able to transfer debtors across the different debt solutions more easily and has access to procedures to reopen a case for a debtor to make new financial contributions.
The increased importance of debt advice
Debt advice takes on a central role with the new Bill and it is important for people to be fully aware of the implications of the new legislation. Independent advice is a crucial aspect to ensure the interests of the debtor in the first place are fully recognised and taken account of.
Any debt solution will now be assessed with new criteria that will seek to strike a new balance between the debtor and the creditor to ensure the organisations who are owed money secure the best return on the outstanding debt.
People experiencing debt problems have an increased responsibility now to seek advice early in order to ensure agreements are reached with their creditors before the problems get worse. This may enable people to utilise other debt solutions for example in order to avoid bankruptcy.
E-P Debt provides free and expert advice across Scotland on all debt solutions available to people in financial difficulty. You can speak to an experienced advisor in total confidence and discuss your problem to find out what your best options are.