Scottish Government publishes summary of responses to statutory debt solutions and diligence policy review consultation

The Scottish Government published a summary of responses to its consultation on statutory debt solutions and diligence on 26 January 2023¹. The report covers responses to proposals for reforms to the Scottish statutory debt solutions and debt recovery mechanisms, known as diligence¹. It records agreement levels across five themes, with 46 total responses received, 33 of them from organisations¹.

Support was strongest in the first theme, on protections, information and advice before debt solutions. Of those who answered, 84% agreed with designing a specific mental health process as part of the statutory moratorium, 81% agreed with a new information leaflet requirement for those considering a trust deed, 93% agreed with streamlining the Debt Advice and Information Package, and 95% agreed that language on websites and publications should be simplified¹.

In the second theme, on entry criteria, 67% of those answering agreed with removing the minimum debt threshold for a Minimal Asset Process (MAP) bankruptcy, while 14% disagreed, and 81% agreed with removing the single value asset threshold for a MAP bankruptcy, while 7% disagreed¹. On retaining the £5,000 minimum debt level for Protected Trust Deeds (PTDs), 59% agreed and 27% disagreed¹.

The third theme, on administration, drew the lowest support. On replacing the Common Financial Statement with the Standard Financial Statement as the statutory Common Financial Tool, 42% of those answering agreed, 40% neither agreed nor disagreed and 18% disagreed¹. On retaining the current process of taking full surplus income for contributions in bankruptcy, 49% agreed, 33% disagreed and 18% neither agreed nor disagreed¹. On retaining the income and expenditure methodology as the framework for the Common Financial Tool, 79% agreed and 5% disagreed¹.

The report also records responses on the Debt Arrangement Scheme (DAS) composition process, where 59% agreed with leaving it unchanged¹. Other proposals recorded agreement of 98%, 93%, 86%, 83%, 79%, 78%, 74%, 73%, 68% and 63% among those answering, with varying levels of disagreement and non-response¹.

Why it matters for households

The consultation concerns the formal routes people in Scotland use to deal with problem debt, including sequestration, MAP bankruptcy, Protected Trust Deeds and the Debt Arrangement Scheme¹. The responses indicate where change is more or less likely. Removing the MAP minimum debt threshold and the single value asset threshold drew majority support, which would affect who can access that route¹. Retaining the £5,000 PTD minimum drew majority support but a significant minority disagreed, and some respondents argued the level should rise¹. The Standard Financial Statement proposal, which would change how income and expenditure is assessed across solutions, drew the weakest agreement at 42%¹. The report does not set out final decisions or a timetable for implementation, and no commencement dates have been reported¹.

What happens next

The summary records the responses received; it does not announce which proposals will be taken forward or when¹. No further consultation, legislation or implementation dates are set out in the report¹.