The third of four MALG15 workshops, considering: “New Approaches to dealing with debt- where Scotland leads should the rest of the UK follow?"

1. Christine Sinclair
Convenor, Money Advice Scotland

2. Scottish Statutory Debt Solutions
• Debt Arrangement Scheme
• Protected Trust Deed
• Sequestration

3. Debt Arrangement Scheme
• Advantages for Debtor
• Protection from diligence and sequestration
• Interest & charges frozen
• One payment
• Variation if change in circumstances
• Advantage for Creditor
• Repayment of debt

4. Debt Arrangement Scheme
• Disadvantages for Debtor
• Time to repay the debt and affordability
• Unable to obtain credit except from certain
prescribed purposes
• Disadvantages for Creditor
• Time taken to repay the debt
• Unable to add interest & charges to the debt
• Cost of administering the scheme met by
creditors

5. Protected Trust Deed
• Advantages for Debtor
• Does not have to demonstrate Apparent
Insolvency.
• Not barred from certain types of employment.
• Wages arrestment ceases.
• Normally discharged after 4 years.
• Advantages for Creditor
• Assets realised for the benefit of creditors.

6. Protected Trust Deed
• Disadvantages for Debtor
• May have to sell home.
• Disadvantages for Creditor
• Dividend paid may be very low.

7. Bankruptcy
• Advantages for Debtor
• Normally discharged after 1 year (or 6 months
for Minimal Asset Process).
• Existing diligence ceases to have effect.
• Advantages for Creditor
• Assets realised for the benefit of creditors.

8. Bankruptcy
• Disadvantages for Debtor
• May have to sell home.
• Cannot hold certain jobs or public positions.
• Access to credit is limited to £500.
• Disadvantages for Creditor
• Dividend paid, if any, may be very low.

9. Ian Fiddeman
Policy Director, British Bankers Association

10. What makes a Good Debt Solution?
Good
Outcomes
CREDITORS
CUSTOMERS
Binding
Fair
Efficient
Consistent

11. Options In England & Wales
• Informal
Arrangement
• Formal
Forbearance
• Debt
Consolida?on
• DMP
• Administra?on
Order
• Debt
Relief
Order
• IVA
• Bankruptcy
Regulatory
Framework
Legisla?ve
Framework
Prescrip?ve
solu?on
Flexibility

12. Questions?
• What do you see as the benefits / drawbacks of the
Scottish debt solutions?
• Is a legislative approach too prescriptive/ inflexible
to treat customers individual circumstances?
• Do we have sufficient capacity in the debt advice
sector to implement change?
• What are the barriers to change, and where should
remedies go further?
• How do we get the buy-in of the non-financial
sector?

13. Questions?
High
Road
or
Low
Road?
Andrew
Smith

14. If it ain’t broke don’t fix it?
• We
aren’t
doing
a
good
job
• Because
we
aren’t
reaching
enough
of
the
people
who
need
help
• Because
there
aren't
enough
of
us
• Because
we
squabble
• Because
people
in
debt
hide
away

15. What’s good about DAS?
• Good
for
debtors
• Good
for
creditors
• Feels
morally
right

16. A DAS for England and Wales
• StandsGll
• Freeze
interest
and
charges
• Repay
all
they
can
• Paid
for
by
creditors

17. Evolving the DAS
• StandsGll
for
all
reasons
• Link
to
financial
capability
strategy
• Seamless
link
to
insolvency
procedures
if
necessary
• Single
process,
restoraGve
in
aim

18. Delivering new DAS
• Supply
• RegulaGon
• Funding
• Simplicity