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Scotland
IPC members visited Edinburgh in May to learn more about the proposals in the
draft Bankruptcy & Diligence (Scotland) Bill and other developments on
the Scottish insolvency scene. We met with the Scottish Executive, the Deputy
Accountant in Bankruptcy, the two Scottish RPBs and Citizens Advice Scotland.
The Chairman was subsequently a speaker at the ICAS annual insolvency conference
in November.
Our
discussions covered the proposals for Protected Trust Deeds (PTDs) which are
to be implemented in May 2008 at the earliest, and the proposals to amend Debt
Arrangement Schemes that had received a lower than expected take up. The latter
are to be changed to suspend interest from the date of implementation of a scheme.
A proposed shortened bankruptcy procedure for low income/low asset cases (LILAs)
was discussed with the Accountant in Bankruptcy (AiB) to whom people will petition
direct..
Table 2 – Sequestrations and Protected Trust Deeds in Scotland
Calendar Year |
IVAs approved |
Bankruptcy orders |
1998 |
3016 |
1449 |
1999 |
3195 |
2144 |
2000 |
2965 |
2801 |
2001 |
3048 |
3779 |
2002 |
3215 |
5174 |
2003 |
3328 |
5452 |
2004 |
3297 |
6024 |
2005 |
4035 |
6881 |
2006 |
5430 |
8208 |
It was noted that, unlike in England & Wales and Northern Ireland, the number of PTDs (the Scottish equivalent of IVAs) outstripped sequestrations (bankruptcies) in Scotland since 2000 although this trend is expected to reverse in 2007. The Bankruptcy & Diligence (Scotland) Bill was finally passed in the Scottish Parliament on 30 November and is due to be implemented in December 2007. The provisions of the Act in summary are:
• The one-year discharge for bankrupts undergoing sequestration (this parallels the one-year discharge introduced in England, Wales and Northern Ireland by the Enterprise Act 2002);
• The introduction of Bankruptcy Restriction Orders and Bankruptcy Repayment Undertakings;
• Significant reforms of the regulation of Protected Trust Deeds (the nearest Scottish equivalent to IVAs);
• Reforms to improve the take-up of Debt Arrangement Schemes (originally introduced in 2004);
• The amalgamation of the offices of Interim and Permanent Trustees; • Repeal of the trustees' residence requirement;
• Debtor applications to be handled by the AiB rather than the Court; and
• The minimum debt limit for Apparent Insolvency threshold increased to £3,000.
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