New legislation passing through the Scottish parliament will see changes made to the rules around personal bankruptcy, with the aim being to provide better protections to people in financial difficulty.
A second coronavirus bill has been put before parliamentarians in Holyrood, with part of the plan being to see the minimum level at which creditors can legally make a debtor bankrupt raised to £10,000.
The idea behind the raising of that threshold is to provide further protection to people who have found themselves thrust into real financial problems in recent weeks because of the coronavirus crisis.
Across Scotland, many thousands of people have been left with far lower incomes than they previously had coming into their households because of the virus situation.
For a lot of people, the lockdown and the sudden need for social distancing has resulted in them losing their jobs or seeing their incomes collapse, which for many has meant their debts have gone from being manageable to being unsustainable.
The proposals within the new legislation are designed to give people in that situation in Scotland a better chance of getting to grips with their debts and finding a way forward that doesn’t involve bankruptcy.
The Scottish government has said the incoming laws, in conjunction with others already on the books, should ensure that anyone pushed into unsustainable debt during the coronavirus crisis will be able to get the help they need.
Other important laws in these contexts include those that give debtors in Scotland six months’ worth of protections from their creditors and those associated with Debt Arrangement Schemes, which give anyone who can pay their debts a plan of action for doing so.
“The Scottish government is determined to do all we can to help individuals and businesses who are facing hardship as a result of this unprecedented crisis,” said constitutional secretary Michal Russell.
“The bill will help many people facing bankruptcy, adding to emergency measures which the Scottish parliament has already approved.”
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A long-term personal debt crisis is an inevitable consequence of the Covid-19 pandemic unless urgent action is taken to support people in financial trouble.
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