FALLING birth rates, chronic health problems and drink-related violence. Three issues that are commonly accepted as Scotland's biggest challenges to overcome. Insolvency practitioners, Citizens 'Advice Bureaux and money advisers would add a fourth – an exponential rise in rates of personal debt.
Scotland's bankruptcy, or sequestration, law has changed. A key change will reduce the time a person must spend in bankruptcy from three years to one. This is intended to reduce stigma and allow people to get back on their feet more quickly.
If t
here are no assets to cover costs, the Accountant in Bankruptcy (AiB), a Scottish Government agency, acts as trustee and may appoint an insolvency practitioner as an agent to deal with the case.
There are 70 agents carrying out bankruptcy work for the AiB and they are regulated by the Institute of Chartered Accountants of Scotland (ICAS). They are spread across Scotland, so there is a chance for debtors to meet them face to face. Personal contact in times of severe stress is invaluable.
Proposed changes might jeopardise this. The agency scheme is to be put out to tender this year. Due to procurement rules, this must be open to bidders from the European Union. This raises the spectre of agency work going to unregulated debt-management companies in England, or indeed Europe. They may have no real understanding of Scots law and no geographical spread across Scotland.
The point here is not parochialism, nor am I against competition. An open tender process overlooks the fact that dealing with bankruptcy in Scotland is different. However, an agency scheme that uses English, French or German practitioners would be potentially disastrous for creditors and debtors in Scotland. If ever there was a case for Scottish solutions to Scottish problems, this is it.
• Bruce Cartwright is chairman of the ICAS Insolvency Committee and a partner in Pricewaterhouse Coopers LLP, business recovery services
The full article contains 320 words and appears in The Scotsman newspaper.
