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Bankruptcy and Debt Advice (Scotland) Bill

Bankruptcy and Debt Advice (Scotland) Bill . Claire Orr. Background . 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

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Bankruptcy and Debt Advice (Scotland) Bill

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  1. Bankruptcy and Debt Advice (Scotland) Bill Claire Orr

  2. Background • 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

  3. Overview of the Bill • 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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

  12. 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

  13. 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

  14. 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?

  15. 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

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