Wednesday, 28 March 2012

Scottish Insolvency Reform

The Scottish Government and the Accountant in Bankruptcy, the Scottish equivalent of the insolvency service, is looking for comments on its consultancy process over the reform of personal insolvency procedures.  They are taking comments until the 18th May 2012. 

The consultation looks at:

  • Developing a “Financial Health Service” for debt advice, debt management and debt relief for the people of Scotland, and ensuring that financial education is central to this
  • Developing new statutory debt relief routes for individuals and businesses as well as refining the current range of options - while reinforcing the key principle that individuals who can pay their debts, should pay
  • Strengthening the powers of Accountant in Bankruptcy (AiB) in relation to supervision of trustees in all personal debt relief products
  • Streamlining the process by removing the court from non-contentious creditor bankruptcy petitions and modernising those parts of the current legislation that are outdated
  • Introducing a single financial assessment tool to aid in the calculation of an appropriate contribution from individuals
This is all very well but we hope that the Scottish Government will look at the corporate side of insolvency as the rules and regulations certainly do not favour the debtor with businesses being put into liquidation too quickly.  See our page on the company rescue culture in Scotland.  Whilst the possibility of debt relief for businesses looks interesting this only apply to sole traders.  So companies will not be part of this.

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