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Scottish Statutory Debt Solutions Statistics: October to December 2023 (2023-24 Quarter 3)

An Official Statistics Publication for Scotland

Guide to bankruptcy

Types of bankruptcy - debtor applications

A person can apply to AiB to make themselves bankrupt through a debtor application. To apply for bankruptcy a person must have received money advice from a qualified money adviser (for example from a local authority money advice unit or Citizens Advice Bureau). The two types of debtor application for bankruptcy in Scotland are:

Minimal Asset Process (MAP)

For people on a low income who do not own property and have very little in savings or other assets. Conditions for a MAP are if a person’s debts are not more than £25,000, or own assets not exceeding £2,000. A debtor will be discharged after six months, if they continue to meet the MAP criteria, (cases will be converted to Full Administration where it is found that debtors do not meet MAP criteria). MAP replaced the LILA bankruptcy in April 2015.

Changes to the debt thresholds for MAP bankruptcy came into force temporarily under the Coronavirus Act (No. 2) (Scotland) 2020 and were made permanent on 29 March 2021 under the Bankruptcy (Miscellaneous Amendments) (Scotland) Regulations 2021 and the Bankruptcy and Debt Arrangement Scheme (Miscellaneous Amendment) Regulations 2023. See the Legislation section for more information.

Full Administration

When conditions set out in MAP are not met. Conditions for Full Administration are if a person’s debts are over £3,000, or own assets valuing £2,000 or above.

Types of bankruptcy - creditor and trust deed petitions

Creditor and trust deed petitions can be granted by a sheriff court. Creditors can ask a sheriff to award bankruptcy against a debtor if:

  • they are owed at least £5,000 or
  • they apply for a joint petition with other creditors if the combined debts are at least £5,000 and
  • they have sent the Scottish Government’s Debt Advice and Information Package to the debtor before making the petition and
  • they can show that the debtor is apparently insolvent (i.e. when they appear not to be able to pay their debts). Sheriffs require evidence to support this

If a debtor has not cooperated with a trustee in a trust deed, the trustee has the right to apply to a sheriff to make the debtor bankrupt if they believe this is in the creditors’ best interest. The trustee does not have to demonstrate the previous conditions.

Bankruptcy fee exemptions

Debtors assessed under the Common Financial Tool (CFT) as having no surplus or are in receipt of any of the following benefits are exempted from paying an application fee:

  • Universal Credit
  • Income-related benefit
  • Jobseeker’s allowance
  • State Pension Credit
  • Child Tax Credit
  • Working Tax Credit (with a disability element)
  • Employment and Support Allowance

Further information is available here: Fees for debtor applications.

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