Scotland’s statutory debt solutions and diligence: policy review response

Closed 7 Oct 2022

Opened 12 Aug 2022

Feedback updated 19 May 2023

We asked

As part of the wider review into Scotland’s statutory debt solutions, we asked a range of stakeholders with extensive experience in diligence and the statutory debt solutions to examine the existing debt solutions and determine where improvements could be made. This culminated in the stakeholders involved presenting a report of recommendations to the Scottish Government for consideration.

On 12 August 2022 the Scottish Government published a consultation in response to the working group’s recommendations setting out proposals for future action. The consultation asked for feedback on the Scottish Government proposals before they were progressed further either through legislation, guidance or working with stakeholders.  The consultation ran for 8 weeks and closed on 7 October 2022.

You said

In total, 46 responses to the consultation were received. These included responses from 33 organisations and 13 individuals.  Respondents included local authorities,  creditors, money advice organisations, third sector organisations and other professional bodies, in addition to individuals.  The majority of the proposals in the consultation received overwhelming support of 70% and more.

We did

In January 2023 the Scottish Government published a summary of the responses to the consultation. Those responses have been fully analysed. We have reviewed what proposals received clear support and could be progressed without requiring further consideration. Of those proposals, some required legislative changes while others could be accomplished through guidance. Some of the legislative changes can be achieved through secondary legislation and we are taking steps to progress those.

The introduction of a mental health moratorium was the key proposal which required primary legislation. This has been included in the Bankruptcy and Diligence (Scotland) Bill which was introduced in Parliament on 27 April 2023. The provision within the Bill is an enabling power with the detail of the moratorium to be introduced through secondary legislation. Currently, a working group of stakeholders with expertise in the mental health and debt sectors is considering each aspect of the moratorium and how it will work in practice. The group will provide recommendations to the Scottish Government which will be considered as the Bill progresses through Parliament and before the required secondary legislation is drafted and introduced to Parliament.

Proposals on diligence measures to modernise existing debt recovery mechanisms and allow for more streamlined and improved processes are also included in the Bill.  So too are some minor or technical reforms to bankruptcy legislation that serve to provide clarity and improve the operation of bankruptcy processes.

Proposals that will not require legislative changes will be progressed by the office of the Accountant in Bankruptcy.  This will include the development of a new information leaflet for those considering a trust deed, simplifying language and terminology across websites and publications, streamlining the Debt Advice and Information Package and clarifying guidance on how vehicles are treated in bankruptcy.

Results updated 7 Feb 2023

Summary Report of the responses received to the Scottish Government proposals for reforms to the Scottish Statutory debt solutions and debt recovery mechanisms (diligence).


Published responses

View submitted responses where consent has been given to publish the response.


The Scottish Government committed to a policy review of both formal debt recovery mechanisms (known as diligence) and the statutory debt solutions (moratorium protection, bankruptcy, Protected Trust Deeds and the Debt Arrangement Scheme) with the aim of further enhancing and improving our system.

This consultation sets out the Scottish Government’s response to the second stage of the review. Stage 2 of the review has been stakeholder led and involved the creation of three dedicated working groups to look at key aspects of current statutory debt solutions. The working groups drew on a wide range of expertise and knowledge from representatives from all sectors involved in the debt landscape. Each working group produced a paper outlining its considerations and recommendations. Some of the issues considered were complex in that there were strongly opposing views amongst stakeholders - it was not always possible to reach a consensus on the best way forward. Where that was the case, the key arguments and information discussed were set out for ministers to consider further.

The review of diligence was taken forward separately through the Diligence Working Group which has produced and published its report and recommendations.

In light of the consultation and work undertaken to date, the Scottish Government’s response to these policy reviews, and its proposals for future action contained in this document are being opened to consultation over an abbreviated timeframe of eight weeks.

The feedback received during this consultation will enable us to finalise changes and plan for these to be taken forward, either through legislation, guidance or working with stakeholders.

Read the consultation paper.

Why your views matter

Consultation and feedback is an essential part of the policy making process. We want to make sure our statutory debt solutions continue to evolve and duly meet the needs of those who access them. To do this we are committed to continuously improving our legislation and processes and your feedback will be used to help shape policy. 


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