Bankruptcy law reform aims to ease Scots debt woes

• Every Scot with cash woes will have access to money advice before becoming bankrupt

• They will also get financial education, as part of the Bankruptcy and Debt Advice (Scotland) Bill

Every Scot with cash woes will have access to money advice before becoming bankrupt and will also get financial education, as part of the Bankruptcy and Debt Advice (Scotland) Bill published today.

Citizens Advice Scotland say almost 120,000 Scots sought their help last year after racking up debts they couldn’t afford. Average debts have hit £15,000, and there has been a worrying rise in the number of young people who owe huge amounts before they reach 21.

‘Modernising’ bankruptcy laws

Enterprise minister Fergus Ewing said the new legislation aims to modernise bankruptcy laws for the 21st century to help those struggling with debts.

Mr Ewing said today: “This is one of the most ambitious and far-reaching reforms ever considered by both the Scottish Government and Accountant in Bankruptcy.

“The Bill provides access to fair and just processes, allowing debtors to gain control of their debt and their lives and ensures that Scotland leads the way in meeting the rights and needs of debtors and creditors.

“It is vital that people who are experiencing financial hardship have the benefit of advice on the range of options open to them. By taking advice early, many people may be able to avoid bankruptcy by reaching an agreement with their creditors.”

Debt Arrangement Scheme

The Debt Arrangement Scheme (DAS) already provides an alternative route for people in debt, with the minister insisting bankruptcy which should always be “a last resort.”

Mr Ewing added: “The reforms provided for in this Bill ensure that our law on debt relief can deal with the challenges we face in modern society, providing appropriate solutions and protection to both those in debt and their creditors.

• Personal debt of Scots second lowest in UK

• Bankruptcy rate down as Scots turn to debt plans