Christine Sinclair
Convenor, Money Advice Scotland
Scottish Statutory Debt Solutions • Debt Arrangement Scheme
• Protected Trust Deed
• Sequestration
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
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
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.
Protected Trust Deed • Disadvantages for Debtor
• May have to sell home.
• Disadvantages for Creditor • Dividend paid may be very low.
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.
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.
Ian Fiddeman
Policy Director, British Bankers Association
What makes a Good Debt Solution?
Good Outcomes
CREDITORS CUSTOMERS
Binding Fair
Efficient Consistent
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
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?
Questions?
High Road or Low Road?
Andrew Smith
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
What’s good about DAS?
• Good for debtors • Good for creditors • Feels morally right
A DAS for England and Wales
• StandsGll • Freeze interest and charges • Repay all they can • Paid for by creditors
Evolving the DAS
• StandsGll for all reasons • Link to financial capability strategy • Seamless link to insolvency procedures if necessary • Single process, restoraGve in aim
Delivering new DAS
• Supply • RegulaGon • Funding • Simplicity