Personal Debt Woes Landing 1,000 Scots in Court Each Day
December 17, 2014
An average of more than 1,000 people in Scotland were taken to court because of their personal debts and outstanding arrears over the course of 2013/14, according to official figures from the Accountant in Bankruptcy (AiB).
The figures were published alongside a report that revealed a majority of the personal debt-related court cases brought across Scotland in the past year related to unpaid council tax arrears.
As many as 376,000 Scots were taken to court in relation to personal debts in the relevant period, which represents an increase of 20 per cent nationwide on the figure for the previous 12 months.
Only one area of Scotland, North Strathclyde, saw a fall in the number personal debt-related court cases in the last year, while the numbers in some parts of the country increased by almost 50 per cent, the Herald reports.
The fact that 80 per cent of newly-brought personal debt court cases across Scotland related to council tax arrears has prompted concern in some quarters, not least at Citizens Advice Scotland (CAS), which provides thousands of heavily indebted Scots with financial guidance every month.
“Scotland’s Citizens Advice Bureaux advised on over 13,500 council tax arrears issues this last year. That’s a seven per cent increase on the previous year,” said Keith Dryburgh, CAS policy manager.
“We think there are a number of factors which have impacted on people’s ability to keep up with their council tax. These include benefit cuts and low wages,” he said.
Dryburgh also expressed concern though that the debt collection practices of councils in Scotland are “being ramped up at just the time when families are less able to pay”.
“We understand councils need to recover monies owed, but this is still a time of economic constraint for many households who are struggling to make ends meet. Councils need to ensure that they support clients to seek independent, free and impartial advice,” he said.
The AiB’s figures offered a possible insight into why councils have suddenly become so much more willing and able to take debtors in Scotland to court over unpaid council taxes, with the number of summary warrants issued by councils rising 20 per cent in 2013/14.
“The introduction of these warrants has been welcomed by councils, because it means they can take court action to recover debts without having to pay any substantial legal fees,” explained Leonie Donald, a partner at the law firm Aberdein Considine.
“However, it is bad news for people in debt, because it means councils can move fast to recover the money they are due – whether that be through freezing funds in bank accounts or bankruptcy,” she said.
There are currently widespread fears that a potential rise in interest rates across the UK could force even more Scots into serious debt and into the position of facing court action over the course of 2015.
If you’re worried that the council might take action against you for non-payment of council tax, entering into a Scottish trust deed can be a beneficial step. It stops legal action by all creditors included in the arrangement, and provides a ‘safe haven’ from which to regain control of your finances. As council tax arrears […]
A debt payment programme (DPP) remains on your credit file for six years, along with other default markers and court judgments that have been made against you. This can seriously affect your ability to borrow for this period of time, and longer. Even if you can secure borrowing, lenders are only likely to offer unfavourable […]
If you owe a debt of £5,000 or less, your creditor may send you a Simple Procedure Notice of Claim. This is a relatively new procedure that was brought in by the Scottish government and commenced on 28th November 2016 – their intention being to make it easier to resolve debt disputes. So if you’ve […]
A Bankruptcy Restriction Order may be made against you if it’s believed that you acted dishonestly, recklessly or unlawfully before you were made bankrupt, or during your bankruptcy. Your Trustee will inform the Accountant in Bankruptcy (AiB), and if their suspicions are upheld, a BRO of 2-15 years can be made depending on the seriousness […]
Debt payment programmes (DPPs) are an intrinsic part of the Debt Arrangement Scheme, which allows you to pay off unsecured debt at an affordable rate. If a debt payment programme is rejected by one or more creditors, the DAS Administrator can apply their discretion on whether to approve the plan, after using a test to […]
If you’re struggling to pay your unsecured debts, a debt payment programme could help you to regain control of the situation, and become financially stable again. Debt payment programmes are a fundamental part of the Debt Arrangement Scheme (DAS) in Scotland, and allow you to repay over a longer period of time. These programmes involve […]