Debt Management

– Scottish Parliament written question – answered on 19th December 2001.

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Photo of Angus MacKay Angus MacKay Labour

Question S1W-21207

To ask the Scottish Executive when it will announce the outcome of the recent consultation on the report of the working group on a replacement for poinding and warrant sale, Striking the Balance: A New Approach to Debt Management , and how it intends to proceed.

Photo of Jim Wallace Jim Wallace Liberal Democrat

I have today placed a summary analysis of the results of the consultation process on the Scottish Executive website. Copies have also been sent to the Parliament’s Reference Centre.

The consultation revealed very widespread support for the approach recommended by the group. Its main recommendations were ensuring the provision across Scotland of user-friendly advice and information for debtors; creating a statutory debt arrangement scheme; creating new incentives for debtors and creditors to reach negotiated settlements; reforming the enforcement procedure to improve debtor protection where legal action is necessary, but also providing for a final sanction against those who can pay their debts but won’t pay.

In the Executive’s view, the group’s proposals are balanced and forward-looking, and would bring about a sea-change in the way that debt issues are handled in Scotland. That view was confirmed by the welcome for them expressed in the consultation responses. We therefore propose to implement the group’s recommendations. In particular, we will:

Invest an additional £3 million a year in advice services across the country. This is over and above existing local money advice provision

Produce a new information and advice pack to be issued by the courts whenever legal action for debt is proposed

Consult on proposals for a debt arrangement scheme to allow people to pay debts in a managed way, without the threat of enforcement action, and

Bring forward legislative proposals for a new, less intrusive court procedure, which will give debtors much greater protection, while still allowing appropriate action to be taken against the few who can but refuse to pay their debts.

A more detailed announcement will be made in due course.

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