Debt Law In Force

Vulnerable Scottish families will be offered greater support from today thanks to new legislation.

The Bankruptcy and Debt Advice (Scotland) Act has been described as one of the most modern systems of debt and bankruptcy advice.

The law introduces a suite of measures, including the Minimal Asset Process, which offers debt relief quickly and at less than half the cost of an application for bankruptcy under the previous equivalent scheme for those on low incomes.

Other measures as part of the new legislation include:

• Mandatory money advice for people seeking access to statutory debt relief instruments such as sequestration (the equivalent term in Scotland for bankruptcy) to ensure debtors are matched with the solution that best fits their needs and circumstances
• Compulsory financial education for those who have been sequestrated more than once to help with their financial rehabilitation and prevent future financial difficulties
• Introduction of a Common Financial Tool for money advisers, allowing them to quickly assess whether individuals can contribute towards repayment of their debts and what the level of their contribution should be
• A new web-based bankruptcy application system
• Creditors are obliged to submit claims no later than 120 days after notification by the trustee

Business Minister Fergus Ewing said: “This new law places Scotland firmly at the forefront of efforts on how to help some of the most financially vulnerable in society.

“These measures have been developed following years of consultation with experts across the financial advice community and from studying how other nations deal with issues of personal debt.

“It is only proper that we seek to do everything we can to help financially rehabilitate families and individuals on low incomes and with little by way of assets who are struggling with debt, while still offering a fair deal for those owed money.

“Taken as a whole, this pioneering legislation seeks to bring dignity to those people in Scotland seeking to break the cycle of debt once and for all.”

According to StepChange Debt Charity Scotland, the average amount of debt in  north east Fife rests at £12, 961.91.