The Bankruptcy and Diligence (Scotland) Bill: General Principals

The Bankruptcy and Diligence (Scotland) Bill has recently ended its third stage of deliberations at parliament. The Bill (as passed) aims to streamline the regulation of bankruptcy and debt recovery processes in Scotland. Briefly, the core principals of the Bill are:

Debtor Protection Measures

The Bill provides support and protections for a specific group of debtors by the creation of a new moratorium on the recovery of debt. The provisions attempt to make debt relief solutions fit for purpose and accessible to those who may need them most. Much of the detail of these provisions has however been left to secondary legislation.

Modernisation of Bankruptcy Procedures

The Bill introduces several changes to the processes set out in the Bankruptcy Scotland Act 2016. Most of these changes correct errors found in the existing legislation. Some of the main areas targeted are: the process for applying for recall of sequestration, payment of interest, gratuitous alienations and protected trust deeds, amongst others.

Revisions to Diligence Procedures

Diligence (the legal process by which creditors enforce payment of debts) sees notable changes under the bill including revisions to procedures such as arrestment (freezing of assets), attachment (seizure of property) and arrestment (seizure of money). The bills seeks to modernise and improve these specific recovery mechanisms.

Conclusion

The Bill aims to strike a balance between the interests of both the debtor and the creditor. Whether that happens in practice is yet to be seen. Full details of the Bill can be found on the Scottish Parliament website: Introduced | Scottish Parliament Website.

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Scott Runciman
Associate, Debt Recovery