AMONGST other measures, the Bankruptcy and Debt Advice (Scotland) Act (Badas), which comes into force in April, seeks to ensure appropriate debt relief and management and includes mandatory provision of money advice.
As such, it deserves a cautious welcome, though, perhaps appropriately, the bill represents the Scottish Government’s adoption of a “bad ass” attitude towards debtors; a turnaround from its historic position.
Certainly, the recent launch by business minister Fergus Ewing of a new Financial Health Service offering a one-stop-shop for money advice services is to be welcomed.
A key part of the website is a Financial Education module, which aims to help people to manage their money to stop any future problems. The website also allows users to search for their local credit unions and find out about the products offered by them, and to search for approved money advisers.
Yet the government’s new-found “bad ass” attitude can be found in the fact that the period for making a contribution will now be increased from three years to four and the fact that there will be no automatic discharge in the future, requiring a degree of proactivity on the part of the trustee to confirm that a debtor is deserving of a discharge from the obligations of bankruptcy.
The bill represents a welcome move to modernise legislation, which is to be lauded, as is the division of the duties within Accountant in Bankruptcy at managerial level.
Happily, the bill is scheduled to come into effect at a time when the number of Scottish businesses going to the wall is continuing to fall, with the latest figures showing that the number of liquidations and receiverships has dropped for the second successive quarter. The trend was even stronger with personal bankruptcies, which have fallen to levels not seen since before the downturn in 2007-2008. And a total of £9.3 million was repaid to creditors under the Debt Arrangement Scheme, £1.6m more than the same quarter in the previous year.
Ultimately, of course, despite introducing some welcome reforms, the bill is 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