The forthcoming Bankruptcy and Debt Advice (Scotland) Bill is already known as the “Badas” bill. While an acronym, this is also an apt moniker as the bill represents the Scottish Government’s adoption of a “bad ass” attitude towards debtors.
That attitude can be found in the fact that there will be compulsory money advice before anyone can petition for their own sequestration.
While it is sensible that people are required to take proper advice prior to entering into sequestration, the question raised by compulsory money advice is just who is going to provide it as there is no additional money being made available by the government to assist in this regard?
Indeed, while the stated policy objectives of the bill might well be to ensure that people have access to fair and just processes of debt advice, debt relief and debt management; ensure that those individuals who can, should pay their debts; and to secure the best return for creditors by ensuring the rights of debtors and creditors are balanced, the underlying impetus behind the bill is a cost-cutting exercise.
Attempt to further streamline government costs
Insolvency experts Accountant in Bankruptcy has a policy objective to move towards full cost recovery and this bill represents an attempt to further streamline government costs. It seeks to do so by moving some procedures out of the courts, which has led to concern that some aspects of sequestration that many insolvency practitioners believe require some judicial input will be treated as little more than an administrative procedure.
Given that the policy objectives for the bill are that the government will deliver a debt relief and debt management system for the Scottish population that’s fit for purpose; to provide a return to creditors as far as is possible; and that debtors, if they can pay, will pay some sort of contribution, then the difference between what the debtor can contribute and what the creditor receives are the expenses – and that’s where any cost-cutting measures will take place.
Ultimately, despite being promoted as one of the Scottish Government’s most ambitious and far-reaching reforms, the Badas bill is, appropriately, all about the money.
• Eileen Blackburn is partner and head of business recovery at FD Debt Solutions, and chair of R3’s Scottish Technical Committee