Bankruptcy and Debt
Advice (Scotland) Act
John Cook
Background
• Consultation in spring 2012
• BADAS Bill introduced to Parliament June
2013
• Completed Stage 3 in March and became an
Act at end April
• Will come into force in April 2015
Overview of the Act
• Creates the framework for a Financial Health
Service for Scotland.
• It aims to ensure that people have access to
the best solution for their circumstances
• It provides a common approach to the
assessment of surplus income and seeks a
fair contribution from those who can pay
• It provides a new route into bankruptcy –
Minimal Asset Process
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 of who can act as money adviser
will be detailed 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
£17,000
• 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 owned
• 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
Discharge
• Automatic discharge in MAP after 6 months
• In other cases, Trustee must automatically
report to AiB at 10 month point. AiB will make
decision on discharge
• Only those who have not complied will have
discharge delayed. Expect most discharges
to be at 12 month point.
• Appeal to Sheriff if debtor disputes
• Discharge delayed indefinitely if debtor cannot
be traced
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 for less than 5 years
• Curing defects
Review of decisions by AiB
AiB will have a new Review function in relating
to some of its decisions:
• Interim trustee functions
• Award of bankruptcy
• Replacement trustee
• Adjudication of creditors claims
• Discharge of Trustee or Debtor
AiB’s New Case Management System
In order to support the new Act, a new case management
system is under development – BASYS (Bankruptcy
Administration System). Key points:
• Web-based system
• Integration of Common Financial Tool
• Electronic submission of Bankruptcy applications
• Increased capability for electronic transactions
• BASYS will ‘go live’ from April 2015
Working with BASYS
• Access will be granted to external users
• AiB will run a training exercise
• Forms will be validated to prevent incomplete or
erroneous completion
• Input will be sought from external users on functionality
• Work has commenced and first iteration of the
development has been released for testing
User login
Common Financial Tool dashboard
Debtor details
Income details
THANK YOU
John Cook, Executive Director, Case Operations
0300 200 2926, john.cook@aib.gsi.gov.uk
1 Pennyburn Road, Kilwinning, Ayrshire, KA13 6SA
T 0300 200 2600 F 0300 200 2601 W www.aib.gov.uk