Bankruptcy (Scotland) Act 2016 comes into force

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30 November 2016

The new Bankruptcy (Scotland) Act 2016 comes into force today, bringing together Scottish laws on insolvency for the first time in a generation.

The Act captures all of the amendments made to the primary legislation governing bankruptcy in Scotland, the Bankruptcy (Scotland) Act 1985, including the wide-ranging reforms introduced in April 2015 through the Bankruptcy and Debt Advice (Scotland) Act 2014. 

The existing Bankruptcy Regulations have also been updated and consolidated and will come into force along with the new Act.

Policy officials from Accountant in Bankruptcy (AiB) worked with the Scottish Law Commission, which published a consultation paper on consolidating bankruptcy legislation in 2011 and led the process of drafting the Bill.

David Menzies, ICAS Director of Insolvency said: “The introduction of the Bankruptcy (Scotland) Act 2016 and supporting Regulations will be of significant benefit to insolvency practitioners and others who access the legislation on a regular basis.

“The collaborative approach adopted by the Scottish Government, the Accountant in Bankruptcy and the profession through ICAS and other bodies to deliver the consolidated legislation reflects the desire of all to ensure there is an accessible and suitable framework for the people of Scotland to deal with debt problems.

“The commencement of the new legislation is not the end of that process, but is the beginning of a fresh phase building on reinforced foundations.”

The Scottish Government said that by consolidating all of the various elements of legislation in one place, the aim of the new Act is to make the complex area of bankruptcy more accessible for insolvency professionals, money advisers and those experiencing financial difficulties.

The Bankruptcy (Scotland) Act is only the second ever consolidation of primary legislation considered by the Scottish Parliament, following the Salmon and Freshwater Fisheries (Consolidation) (Scotland) Act 2003.

Paul Wheelhouse, Minister for Business, Innovation and Energy, said: “Much has changed in the 30 years since the existing bankruptcy Act was introduced and there is no doubt it has become somewhat impenetrable.

“This valuable work to clean up the statute book will make the legislation much easier to use and understand and has created the platform upon which debt solutions appropriate for the challenges we face today can be delivered.

“There has been a comprehensive programme of consultation – and I thank all those who fed their views to us – and it is tremendously pleasing to see this activity bearing fruit with the legislation coming into force today.”

Eileen Blackburn, chair of insolvency trade body R3 in Scotland’s Technical Committee, added: “The much-anticipated Bankruptcy (Scotland) Act 2016 is the culmination of a process of modernisation of personal insolvency in Scotland which has been ongoing since 2009.  

“It provides a cohesive and user-friendly piece of legislation, fit-for-purpose for the 21st century.”

Source: Scottish Government


  • Insolvency

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