News In Focus
3 January 2008
Low cost bankruptcy offered for poorest debtors
A low cost bankruptcy scheme to help the poorest debtors wipe the slate clean is to be introduced by the Scottish Government.
Set up on the advice of an expert working group, the Low Income Low Asset scheme will be available to those with an income of less than £220 (the minimum wage for a 40-hour week) and no assets worth more than £1,000. It will allow them to be declared bankrupt for a fee of £100.
Ministers will lay regulations under the Bankruptcy and Diligence Act 2007 to let the Accountant in Bankruptcy provide this service. The scheme is aimed at those whom their creditors consider not worth pursuing through the courts, who have no way to declare themselves bankrupt.
Minister for Community Safety Fergus Ewing said:
"Bankruptcy is not an easy option. In itself it has longer term consequences that should be carefully considered before application.
"But this government has listened to the views of Citizens Advice Scotland and Money Advice Scotland who say that over 1,000 people across Scotland with low income and assets desperately need a new way to find relief from their debt."
Yvonne Gallacher, Chief Executive of Money Advice Scotland, said: "We are pleased that government has listened to the advice sector, who have a wealth of experience in dealing with individuals in society who presently cannot access a bankruptcy route, due to their status."