Bankruptcy and Debt
Advice (Scotland) Bill
Claire Orr
Background
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Consultation in spring 2012
Government response autumn 2012
On-going dialogue with stakeholders
Bill introduced to Parliament June 2013
DAS Regulations amended from 2 July
PTD changes from November, Corporate
Insolvency and Business DAS to follow
Overview of the Bill
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Advice and Education
Payments by debtor following sequestration
Minimal Asset Process
Moratorium on Diligence
Application process
Administration of estate
Discharge
Records
Functions of sheriff and AiB
Review of decisions by AiB
Advice
• Application for sequestration only if advice
has been given by an approved money
adviser
• Application must now include a declaration by
the adviser that advice has been given
• A definition provided of who can act as money
adviser will be made by Regulations
Education
• Provides for Regulations to set appropriate
courses of financial education for debtors
whose financial history and circumstances
Identify them as vulnerable to recurring debts
• Content, format and delivery of the education
will be set out in Regulations
Payments by Debtor
• Power to provide a common financial tool for
assessing a debtor’s income, allowed
expenditure and debtor’s contribution
• Debtor required to undertake to pay the
contribution determined by the common
financial tool
• Standard period of contribution – 48 months
• New ‘debtor contribution order’ replaces
Income Payment Order.
• New payment break of up to 6 months
Minimal Asset Process
• New Minimal Asset Process (MAP) – replaces
LILA
• Assessed as not able to make a contribution
or has been on benefits for at least 6 months
• Debts of at least £1,500 but no more than
£10,000
• Total assets do not exceed £2,000 and no
single asset of more than £1,000 (except car,
up to £3,000) and no land
• 6 month discharge
• Once in 10 year access to MAP
Moratorium on Diligence
• A new moratorium will apply on giving notice
of intention to apply for a statutory debt
solution
• Details will be entered by AiB on RoI and DAS
Register
• Protected for 6 weeks
• No arrestment, money attachment, interim
attachment or attachment of estate can have
effect during this period
• Only one intimation in a 12 month period
Application process
• New statement of undertaking to be signed by
the debtor which includes paying the
determined financial contribution
• Failure to sign or comply could mean a delay
in discharge
Discharge
• No automatic discharge, except in MAP cases
• Trustee will apply to AiB for discharge of
debtor at the end of the sequestration
• If the Trustee is not applying for discharge,
must explain to debtor why not
• Appeal to Sheriff if debtor disputes
• Discharge delayed indefinitely if debtor cannot
be traced
• Process for re-opening if assets discovered
that would have vested in the trustee
Functions of sheriff and AiB
• Administrative procedures passing to AiB
from sheriff
• A few examples – application by a Trustee for
Direction
• Recall of sequestration where debts can be
paid in full
• Appointment of replacement Trustee
• Bankruptcy Restrictions
• Curing defects
Review of decisions by AiB
AiB will have a new Review function in relating
to some of its decisions:
• Interim trustee
• Award of bankruptcy
• Replacement trustee
• Adjudication of creditors claims
• Discharge of Trustee or Debtor
Other Legislative changes
• DAS changes took effect on 2 July 2013
• PTD changes come into effect on 28
November
• Corporate Insolvency – December
• Business DAS – 2014
• Bankruptcy and Debt Advice (Scotland) Bill
and Consolidation – commencement April
2015
Questions for consideration
• What will you need to do in your organisation
to prepare for the changes ahead?
• What help will you need from AiB and others?
THANK YOU
Claire Orr, Executive Director, Policy and Compliance
0300 200 2699, claire.orr@aib.gsi.gov.uk
1 Pennyburn Road, Kilwinning, Ayrshire, KA13 6SA
T 0300 200 2600 F 0300 200 2601 W www.aib.gov.uk