Bankruptcy and Diligence (Scotland) Bill

The Bankruptcy and Diligence (Scotland) Bill (the “Bill”) was introduced in Parliament yesterday.

The Bill brings forward stakeholder-led recommendations from stage two of the wider review of Scotland’s statutory debt solutions, and the review of diligence, together with amendments to the Bankruptcy (Scotland) Act 2016, where the changes require primary legislation. The changes introduce improvements to the current insolvency solutions and diligence.

The provisions in the bill broadly fall into three categories:

  • Enabling powers that provide the platform for the introduction of regulations to introduce a mental health moratorium.  This is a new form of moratorium protection for a specific group of debtors, being those who are experiencing serious difficulties with their mental health as well as having problem debt
  • Minor or technical amendments to existing bankruptcy legislation that would serve to correct errors and remove ambiguity by providing clarity on the operation of bankruptcy processes as set out in the legislation
  • Diligence measures that modernise existing debt recovery mechanisms and allow for more streamlined and improved processes

The Bill will now be referred to the relevant Parliamentary Committees for consideration with the Stage 1 debate expected to take place later this year.

Full details of the provisions can be found in the draft Bill and accompanying documents on the Scottish Parliament website

The Business and Regulatory Impact Assessment has been published on the Scottish Government website. 

If you need more information, please e-mail AiB Policy Development.