The Accountant in BankruptcyMAS Conference - 29th June 2012

What our world like nowConsumer debtDebt management firmsBusiness closuresRecession threatsNew forms of communication & advertisementCredit cards..easy access to debt

The impact in Scotland

Developing a Vision for the 21st CenturyA service for debt advice, debt management and debt relief which will:Ensure access to fair and just processes of debt relief and debt managementSupport the principle that those debtors who can pay should pay their debtsWhilst acknowledging the wide range of circumstances and events that contribute towards bankruptcy for individuals and businessesSecure the best return for creditors ensuring that the rights and needs of those in debt are balanced with the needs of creditors and businesses

A Financial Health Service Providing rehabilitation/repatriation of individuals and organisations in relation to their financial pressures The development and delivery of a range of products including for personal and sole traders/partnerships which recognise differences in terms of the level and cause of debt Different routes/products for individuals which place different expectations on debtors and which encourages them to make appropriate contributions Debtors provided with appropriate advice and aware of the range of optionsAn education role seeking to impact on the culture and behaviours of individuals and prevent repeated financial issues

A Financial Health Service continuedA focus on individual responsibilities - with a greater emphasis on:debtors through an agreement/contract between debtors and the delivererscreditors in terms of responsible lending, active engagement and more differentiation of individuals credit ratingInsolvency Practitioners in terms of seeking to help stamp out bad practice from debt management companies AiB to effectively regulate the service and ensure fair and effective deliveryA research function - to better understand the triggers of debt, bankruptcy and insolvency and where preventative spend could have the greatest impact

AiB as the HubAiBStrategic OverviewCentre of expertise and knowledgeFacilitatorIndependent and honest brokerGatekeeperEfficientEducatorSelective delivererResearch functionRegulator (of regulators in an independent Scotland)Collaboration & consultation - with stakeholdersInformation Provider

Achieving the VisionMinister for Energy, Enterprise and Tourism, Fergus Ewing MSP, said:We must address the problems associated with the financial crisis and recession wherever we can.

The world we live in today is quite different to that of 1985, when the last Scottish bankruptcy act came into force.This consultation considers the principles of bankruptcy and other debt management solutions and is one of the most ambitious and far-reaching reforms ever considered by both the Scottish Government and Accountant in Bankruptcy.

It represents an excellent opportunity for members of the public and concerned parties to contribute towards the future landscape of bankruptcy law in Scotland.

Bankruptcy Law Reform ConsultationKey Principles within the consultation:A range of new solutions/products for debt relief and debt managementEnsuring debtors make a fair contributionIntegrating debt advice and educationA review of the court processes and preventing debtors abusing the systemStrengthening the powers of AiBA single financial assessment tool

Closed on 18th May 2012Currently analysing the responses from 129 responses including 89 organisations

Vision Consultation early indicationsAdvice compulsory prior to access through an approved adviser & not AiB electronic triage system to signpost individualsApplication process electronic but not excluding paper should have evidence of advice AI not needed Intimation and moratoriumEducation financial education integrated into debt relief options not compulsory but linked to certain criteriaFinancial assessment a common tool to determine the level of debtor contributions a range of support for different approaches assessed contribution deducted from wages

Vision Consultation early indicationsThe solutions detailed work needed to analyse all responses align debt levels for debtors and creditors access to bankruptcyDAS for small businessesNo income, no asset, low debt (NINALD) Limited support for a greater range or complexity of products Maintain scope for transfer between productsThe processescontribution period (3 or 5 years?)More regular dividend paymentsCo-operation of debtor linked to discharge - could be indefinite if absent debtor

Vision Consultation early indicationsMore general issues where there was debate:AiB role and powers andReviewing court processes and preventing abuse of the systemExcessive debt incurred prior to bankruptcyChild maintenance debts not survive bankruptcyCredit union debts not survive bankruptcyFunding asset-less bankruptcies Yes but who?

Vision Consultation early indicationsModernisation of legislation to be fit for 21st CenturyConsolidation neededTime frame for creditor claimsClarify processes around recallElectronic sederunt book Optional payment holidays but equivalent delay to dischargeChanges to ROI

Post ConsultationOver the summerOngoing review & analysis of the findingsFurther discussion and debate with MinistersLate summerPublication of responses Autumn and next yearConsideration of legislative options (and the need to consolidate existing legislation)

CAB adviser located in AiBIan BroughIndependent CAB AdviserLocated in AiB, 1 Pennyburn Road, KilwinningContact number: 0300 200 2922e-mail: ian.brough@nacasadvice.org.uk

Rosemary Winter-ScottThe Accountant in Bankruptcy & Agency Chief ExecutiveT: 0300 200 2901 E: ce@aib.gsi.gov.uk

A2072172 31/01/2012A2072172 31/01/2012A2072172 31/01/2012A2072172 31/01/2012A2072172 31/01/2012A2072172 31/01/2012A strategic overview A centre of expertise and knowledge in relation to debt and insolvency policy and legislation A facilitative role encouraging effective delivery by partners and stakeholders and developing appropriate policies, products & toolsAn independent and honest broker undertaking our statutory role, managing conflicts within the sector & sign posting individuals A gatekeeper providing a single gateway through which individuals enter and where AiB oversees an adjudication process Delivering an efficient service which makes maximum use of modern technologyEducation overseeing the provision of financial education and debtor rehabilitation A selective deliverer developing expertise, working in partnership with IPs and securing best value for the public purseEncouraging research in order to better understand the triggers of debt, bankruptcy and insolvency as well as the quality of service provided A regulator granted similar powers to the UK Insolvency service in terms of regulation in Scotland (in event of greater independence) Information provider source of ROI, DAS register etc. and wider information in relation to insolvency & debt.Collaboration and consultative engagement with stakeholders.

A2072172 31/01/2012A2072172 31/01/2012CFS/ CCS/ percentage of incomeA2072172 31/01/2012A2072172 31/01/2012A2072172 31/01/2012A2072172 31/01/2012A2072172 31/01/2012A2072172 31/01/2012A2072172 31/01/2012