Bankruptcy made clearer: One of the bastions of old-style Scots terminology, guaranteed to perplex Southern audiences, is the law of bankruptcy in Scotland as it applies to individuals and assorted others.

But maybe for no longer. The Bankruptcy (Scotland) Act 2016 has reached the statute book. It’s a consolidating act, encompassing statutes from 1985, 1993, 2002, 2007, 2012 and 2014. It introduces a new and fairly modern framework, the aim being to make it less cumbersome and easier to use by those who do not have intimate knowledge of it (most of us!).

The Bankruptcy (Scotland) Act 2016 (the “Act”) received Royal Assent on 28 April 2016 and is expected to come into force by the end of the year.

The Act is only the second piece of primary consolidation legislation to have passed through the Scottish Parliament and brings together the various laws on personal insolvency into a single piece of legislation.

At the moment, the law is rather unwieldy and difficult to follow in practice.

Infrastructure & Economic Development
This briefing sets out some of the key points of the 2016 Programme for
Government, which includes a wide range of policy proposals in areas
such as infrastructure and economic development, public administration,
constitutional change, financial services, taxation and employment law and
industrial relations.
It is expected that the Government’s Legislation Programme will be
published soon, setting out the legislation that the new Government will
promote in order to give effect to the Programme for Government.

In a significant recent judgment, the High Court has set aside an extension of a protective certificate issued to a debtor under the Personal Insolvency Act 2012 on the grounds of material and culpable non-disclosure by a personal insolvency practitioner.

On 25 December 2015 the Bankruptcy (Amendment) Act 2015 (the “2015 Act”) was signed into Irish law. Its purpose is to create a more rehabilitative regime for bankrupt individuals while simultaneously deterring and penalising those who refuse to cooperate with the bankruptcy or who try to conceal income or assets from creditors.

Our latest Financial Services Regulatory Group bulletin contains new updates on significant developments in financial services regulation, including the Personal Insolvency (Amendment) Act 2015, financial services remuneration, cyber-security, the Capital Markets Union, and recent Supreme Court case law regarding the Code of Conduct on Mortgage Arrears and appeals from the Financial Services Ombudsman.

The Personal Insolvency Act 2012 (the “PI Act”) was signed into law on 26 December 2012 and introduces significant changes to the personal insolvency regime in Ireland, as described in our previous client briefing concerning the PI Act (issued in December 2012 and available on our website). All provisions of the PI Act, other than Part 4 which relates to bankruptcy, have now been commenced and it is expected that debtors will shortly be able to avail of the new insolvency measures.

The Land and Conveyancing Law Reform Act 2013 (“the Act”) has been enacted. The Act addresses the unintended consequences arising from the Land and Conveyancing Law Reform Act 2009 (“the 2009 Act”).

Summary

New legislation alters the law and procedures of personal insolvency in radical ways. The Personal Insolvency Act 2012 establishes an independent Insolvency Service of Ireland and introduces new insolvency procedures for addressing unsecured debts (of any value) and secured debts (up to €3 million in aggregate but without limit in the case of agreement). Current bankruptcy laws are amended, including a reduction of the bankruptcy term from 12 years to 3 and the carve-out of pension assets from the bankrupt’s estate.

Draft legislation proposes to alter the law and procedures of personal insolvency in radical ways. The proposals include the establishment of an independent Insolvency Service of Ireland and the introduction of new procedures for addressing unsecured debts (of any value) and secured debts (up to €3 million in aggregate but without limit in the case of agreement). Current bankruptcy laws would also be amended, principally to increase the minimum level of debt required to enter bankruptcy to €20,000 and to reduce the bankruptcy term from 12 years to three.