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New law to help financially-stricken families.

New legislation passed by MSPs will help introduce a ‘Financial Health Service’ for Scotland, providing a modern system of debt advice and debt management.

The Bankruptcy and Debt Advice (Scotland) Bill will introduce measures such as a Minimal Asset Process, which offers debt relief quickly and at less than half the price of an application for bankruptcy under the current equivalent scheme.

The Bill is designed to balance the rights of those in debt with the needs of creditors and businesses. It will make it compulsory for debtors to receive advice from an approved money adviser before entering bankruptcy.

Enterprise Minister Fergus Ewing said,

“The Scottish Government continues to take action, where it can, to address these problems and introduce measures to help those people in Scotland who are struggling under the burden of debt.

“We need a Financial Health Service to help us build the financial capability of people in Scotland. By working with organisations such as church groups and credit unions we will help support people to make better financial choices and prevent future problem debt.

“And we will have a Financial Health Service that brings together different strands and sources of information and advice, so that anybody with a concern or an issue to do with debt or borrowing can find, in one place, the help and assistance that they need.

“We know that the proportion of people entering bankruptcy with low incomes and little by way of assets has risen. These are people who may be affected by the UK Government’s welfare reforms, such as the iniquitous bedroom tax, and who may also be struggling with the burden of high-interest ‘payday’ loans.

“It is absolutely right that we do what we can to help these people.”