MSPs to approve new bankruptcy laws

New laws to be passed today will introduce a "financial health service" for Scotland, Enterprise Minister Fergus Ewing said.

The new laws aim to ensure appropriate debt relief, advice and management, including mandatory provision of money advice
The new laws aim to ensure appropriate debt relief, advice and management, including mandatory provision of money advice

Holyrood is expected to approve reforms to Scotland's bankruptcy legislation.

The Bankruptcy and Debt Advice (Scotland) Bill aims to ensure appropriate debt relief, advice and management, including mandatory provision of money advice.

Compulsory money advice, from an approved adviser, should mean people are aware of all debt solutions available to them.

Mandatory financial education is included for those who need it, such as those who have been bankrupt more than once, in a bid to try to help them avoiding financial difficulties in future.

Speaking ahead of this afternoon's debate on the legislation, Mr 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."

He added: " 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."

But opposition MSPs have previously questioned measures in the legislation which could mean those who become bankrupt are made to pay debts for four years instead of three.

Labour's Jenny Marra said the change would ''hold Scots in bankruptcy for longer than in any other part of the United Kingdom''.