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|Debt Arrangement Scheme repays £100 million to creditors|
|Thursday, 12 November 2015|
Over £100 million has been repaid to creditors since the reform of the Debt Arrangement Scheme in 2011, Business Minister Fergus Ewing has announced.
The Minister was speaking at the Insolvency and Restructuring Conference hosted by chartered accountancy professional body ICAS today (Wednesday, 11 November).
As part of his speech to delegates, Mr Ewing outlined the steps taken to create one of the most modern, transparent and fair systems of insolvency in the world, and highlighted the impact of the Debt Arrangement Scheme (DAS).
DAS was launched by the Scottish Government in 2004 and is administered by Accountant in Bankruptcy.
The Minister said: “The Debt Arrangement Scheme has been a real success story for Scotland. Earlier this year, DAS surpassed an important milestone.
“Over £100 million has now been returned to creditors through DAS since the new regulations were enacted four years ago, opening the scheme up to more people who need help – a vast sum of money and a remarkable achievement.
“DAS remains the only statutory debt management plan in the UK. Earlier this year, the Financial Inclusion Commission highlighted that existing UK debt solutions are not fit for purpose and recommended DAS, which freezes interest and charges on debts and gives debtors much-needed breathing space, is adapted and rolled out across the whole of the UK.
“It is tremendously gratifying to see a respected body like the Financial Inclusion Commission recognise that Scotland is leading the way when it comes to issues of personal debt management and debt relief.”
The total amount paid to creditors through the Debt Arrangement Scheme continues to increase. According to the latest statistics from Accountant in Bankruptcy, a total of £9.6 million was paid back this quarter to the end of September, an increase of 1.5 per cent on the previous quarter.
From 1 July 2011 to 31 October 2015, the amount repaid through DAS has reached a total of £112,338,521. This is a total of all statistics published by the AiB up to and including the latest quarter of 2015. Over 2,100 people have completed debt payment programmes through DAS in the same period, effectively preventing them from having to access debt relief products like bankruptcy or trust deeds.
The Insolvency and Restructuring Conference brought together experts in the insolvency arena and covered the relevant legislative and regulatory changes affecting those in the insolvency community through the introduction of the Bankruptcy and Debt Advice (Scotland) Act in April this year.
Mr Ewing also highlighted the contribution the insolvency sector makes to the Scottish economy, by helping rescue businesses in trouble and giving hard-pressed individuals a fresh start free from debt.
He said: “Insolvency practitioners have a vital role in maintaining a thriving economy in Scotland.
“The Association of Business Recovery Professionals R3 highlighted recently that in 2013/2014, the actions of insolvency practitioners managed to rescue 920 businesses and save 22,400 jobs - in Scotland alone.
“And given there are only a little over 100 insolvency practitioners working in Scotland, that is an incredible contribution.
“This clearly shows the direct link between the insolvency profession and Scotland’s financial health.”
The Minister also announced the drafting of a Memorandum of Understanding with ICAS, which will see closer working between administrators of companies in difficulty and the Scottish Government’s Partnership Action for Continuing Employment (PACE) initiative. PACE seeks to assist businesses and minimise the risk of redundancy before it happens and provides practical support where redundancies do occur. PACE also offers a range of services including skills development and employability support for individuals impacted by redundancy to help improve their prospects of finding work.
The conference comes hot on the heels of the introduction of the new Bankruptcy (Scotland) Bill 2016 to the Scottish Parliament.
The Bill aims to capture all of the amendments made to the primary legislation governing bankruptcy in Scotland, the Bankruptcy (Scotland) Act 1985, as well as new laws brought in since, including the Bankruptcy and Debt Advice (Scotland) Act 2014, which came into force in April this year.
Subject to parliamentary approval, it is anticipated the consolidated legislation will come into force towards the end of 2016, together with updated accompanying subordinate legislation.
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