In Scotland, debt arrangement schemes are available for those who need to pay-off their debts over a longer period. Participants are protected from enforcement action by their creditors, and interest and charges on their debts are frozen. It is only proper that we seek to do everything we can to help families and individuals on low incomes with little by way of assets who are struggling with debt, while still offering a fair deal for those owed money.
The SNP Scottish Government introduced a pioneering law in 2014 which creates one of the most modern systems of debt advice and debt management in the world. The Bankruptcy and Debt Advice (Scotland) Act 2014 introduced a range of measures, including the Minimal Asset Process, which offers debt relief quickly and at less than half the cost of an application for bankruptcy under the previous equivalent scheme for those on low incomes. It also brought in mandatory money advice for people seeking access to statutory debt relief instruments such as sequestration (the equivalent term in Scotland for bankruptcy) to ensure debtors are matched with the solution that best fits their needs and circumstances. The Act also introduced the ‘moratorium on diligence’ process, which inhibits a creditor from taking action against someone struggling to pay their debt for six weeks, allowing a debtor valuable time to seek guidance on available options.
More generally, the SNP Scottish Government is taking action to protect those on low incomes. In response to savage cuts to social security by the Tory UK Government, the Scottish Government established the Scottish Welfare Fund, which is helping low income households through difficult times, with grants totalling £116m to 230,000 homes since the scheme was established in 2013. The Scottish Government also published a new Child Poverty Bill in February this year which will set statutory targets in Scotland to reduce child poverty and establish a framework for measuring, monitoring and reporting on child poverty.