MSE News: New Scottish bankruptcy law 'will cause misery', debt groups say

Across the UK, bankruptcy usually lasts for a year. But in Scotland and Northern Ireland, you may be expected to make regular contributions to your debts for up to three years

No "but". It's the same in England.

Last year 20.1% of bankrupts in England had Income Payment arrangements agreed. The standard/maximum terms of those agreements is 3 years. Payments go according to disposable income, so actual payments can vary across the term from £0 upwards, and in some cases agreements can be discharged if an adverse change is permanent. So a broad spectrum.

Disappointing that an MSE report is so poorly worded - the UK term for IPA's is 3 years too but the item suggests it's only a year.
I thought this comment
"A Scottish Government spokesperson says: "We consulted on this proposal and the majority of stakeholders who expressed a preference preferred a longer contribution period for bankruptcy of five years." was very telling...a hint of that perception that all BR's are crooks an thieves. It will be back to the debtors prison soon in Scotland!!

The purpose of bankruptcy is to give people in severe financial difficulty a way out when it's clear that there is no sensible alternative solution. It's quite possible for someone to say be injured and unable to do their normal work while having debts that were completely affordable when they were working. In that and a wide range of other cases like small business failure it's sensible to have some way out. Bankruptcy is that way and it serves a useful purpose. Those who have credit trouble get most of the adverse press coverage but there's far more to that and if you read the DFW section here you'll see that many of those with debt trouble just didn't realise what they were getting into and need help to get out of it.

Fremi, thanks. That seems to support the story's statement that "Across the UK, bankruptcy usually lasts for a year" and the use of the word but. With about 80% not having an IPA and I assume all or almost all of that 80% being discharged after a year now the story seems right in that respect.

What's less clear is how the Scottish story differs, since the story implies that 100% of those in Scotland would be required to pay. I don't know the Scottish situation well enough to know if that's true or whether there's the same sort of 80% not paying situation as in England. If it's pretty much the same, that whole paragraph might have been best not being present in the story at all...

David @ NDL, thanks, glad I wasn't wrong about that - I'm all for a decent chance for people to recover and that does require a reasonable amount to live on!

Darryl Chamberlain needs to re-write some of that text, as it is misleading, or just downright incorrect!

Having read the article, I understand the gist of it to mean, the Scots are viewing a proposal to extend their time period for the [rest of the UK's] equivalent of an IPA/IPO.

I suspect this is an attempt to offset the considerable administrative costs of a BR....rather than to try and return further monies to creditors.

If a two-tier UK BR system emerges, then I suspect , prior to petitioning a BR, folk might just re-locate?