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Bankruptcy and Diligence (Scotland) Bill

The Bill aims to make changes to the law around bankruptcy and diligence.

This is a Government bill

The Bill became an Act on 15 July 2024

Introduced: the Bill and its documents

Overview

At its introduction, the Bill aims to change the law in three main areas. It will:

  • give powers to the Scottish Ministers to establish a pause on debt recovery action against people who are in debt and who also have a mental illness
  • make technical changes to the law on bankruptcy
  • update the law on diligence

Bankruptcy is a formal way of dealing with debts when people cannot afford to pay their debt (in money or belongings).

Diligence is the legal processes that creditors can take to enforce repayment of overdue debts.

Why the Bill was created

In Session 5 the Scottish Parliament’s Economy, Energy and Fair Work Committee recommended that the Scottish Government should review the debt solutions available to people with problem debt in Scotland.

In response to the Committee’s report, the Scottish Government is undertaking a policy review. Groups of people have been looking at different areas of debt law and making recommendations for improvement. The Scottish Government has also asked for people to share their views.

Accompanying Documents

Explanatory Notes (172KB, pdf) posted 27 April 2023

Policy Memorandum (296KB, pdf) posted 27 April 2023

Financial Memorandum (237KB, pdf) posted 27 April 2023

Delegated Powers Memorandum (176KB, pdf) posted 27 April 2023

Statements on legislative competence (118KB, pdf) posted 27 April 2023

Accompanying Documents (print versions)

Explanatory Notes (315KB, pdf) posted 27 April 2023

Policy Memorandum (406KB, pdf) posted 27 April 2023

Financial Memorandum (322KB, pdf) posted 27 April 2023

Delegated Powers Memorandum (229KB, pdf) posted 27 April 2023

Statements on legislative competence (169KB, pdf) posted 27 April 2023

Financial Resolution

The Presiding Officer has decided under Rule 9.12 of Standing Orders that a financial resolution is not required for this Bill.

Research on the Bill

The Scottish Parliament's Information Centre (SPICe) prepares impartial research and analysis to assist MSPs in their examination of Bills and other parliamentary business.

Research briefing on the Bankruptcy and Diligence (Scotland) Bill

The Bill was introduced on 27 April 2023

Stage 1: general principles

At Stage 1, the Bill is given to a lead committee. This is usually the committee whose remit most closely relates to the subject of the Bill. The lead committee will consider and report on the Bill. Other committees may also examine the Bill and report to the lead committee. Finally, there is a debate and vote by all MSPs on the general principles of the Bill. If the general principles are not agreed to, then the Bill ‘falls’ and can’t become law.

Timetable for Stage 1

On 13 September 2023, Parliament agreed motion S6M-10421, that consideration of the Bankruptcy and Diligence (Scotland) Bill at stage 1 be completed by 24 November 2023.

On 8 November 2023, Parliament agreed motion S6M-11145, that consideration of the Bankruptcy and Diligence (Scotland) Bill at stage 1 be extended to 23 February 2024.

Lead committee examines the Bill

The lead committee for this Bill is the Economy and Fair Work Committee.

Call for views (closed)

The Economy and Fair Work Committee held a call for views to help inform its examination of the Bill. 

Read the call for views

The call for views closed on 21 July 2023.

Meetings

Engagement

In addition to the public evidence sessions and the call for written views, the committee held an engagement session with One Parent Families Scotland and Poverty Alliance.

Read the engagement notes (112KB, pdf) posted 15 November 2023

Correspondence: lead committee

Bankruptcy and Diligence (Scotland) Bill - Follow-up from the evidence session

Letter from Richard Dennis, 5 December 2023

Bankruptcy and Diligence (Scotland) Bill - Follow-up from the evidence session

Letter from Alan McIntosh, 27 October 2023

Earnings Arrestment

Letter from COSLA, 26 October 2023

Bankruptcy and Diligence (Scotland) Bill - Follow-up from the evidence session

Letter from Alan McIntosh, 21 September 2023

Bankruptcy and Diligence (Scotland) Bill - Mental Health Moratorium Working Group report

Letter from the Minister for Community Wealth and Public Finance, 5 September 2023

See a full list of Stage 1 correspondence

Stage 1 report by the lead committee

The lead committee published its stage 1 report on 23 January 2024.

Stage 1 Report on the Bankruptcy and Diligence (Scotland) Bill

The committee received the following response to its report:

Letter from the Minister for Community Wealth and Public Finance (176KB, pdf) posted 02 February 2024

Work by other committees

Delegated Powers and Law Reform Committee

Meetings

Report

The Delegated Powers and Law Reform Committee published its report on 22 June 2023.

Read the report

Delegated Powers and Law Reform Committee Correspondence

Bankruptcy and Diligence (Scotland) Bill

Letter from the Minister for Community Wealth and Public Finance to the Convener, 23 February 2024

Bankruptcy and Diligence (Scotland) Bill response from the Scottish Government

Letter from the Scottish Government to the Clerk, 14 June 2023

Bankruptcy and Diligence (Scotland) Bill letter to the Scottish Government

Letter from the Clerk to the Scottish Government, 7 June 2023

See a full list of Stage 1 correspondence


Finance and Public Administration Committee


Social Justice and Social Security Committee

Meetings


Stage 1 Debate and decision

A Stage 1 debate took place on 6 February 2024 to consider and decide on the general principles of the Bill.

  • Motion title: Bankruptcy and Diligence (Scotland) Bill
  • Text of motion: That the Parliament agrees to the general principles of the Bankruptcy and Diligence (Scotland) Bill.
  • Submitted by: Tom Arthur
  • Date lodged: Monday, 05 February 2024
  • Motion reference: S6M-12070
  • Current status: Taken in the Chamber on Tuesday, 06 February 2024

See further details of the motion


Parliament agreed the general principles of the Bill

The Bill ended Stage 1 on 6 February 2024

Stage 2: changes to the Bill

At Stage 2, MSPs can propose changes to a Bill. These are called 'amendments'. Any MSP can suggest amendments but only members of the Stage 2 committee can decide on them. 

Meeting on amendments

Documents with the amendments considered at the meeting on 20 March 2024:

Marshalled List of Amendments for Stage 2 (312KB, pdf) posted 15 March 2024

Supplement to the Marshalled List of Amendments for Stage 2 (189KB, pdf) posted 19 March 2024

Groupings of Amendments for Stage 2 (326KB, pdf) posted 15 March 2024

Stage 2 Correspondence

Bankruptcy and Diligence (Scotland) Bill - Arrestments and social security benefits

Letter from University of Aberdeen, 23 April 2024

Bankruptcy and Diligence (Scotland) Bill - New earning arrestment model

Letter from Alan McIntosh, 21 March 2024

Bankruptcy and Diligence (Scotland) Bill - Bank account arrestments and social security benefits

Letter from Alan McIntosh, 21 March 2024

Bankruptcy and Diligence (Scotland) Bill - MAP 10 year rule and earnings arrestments

Letter from COSLA, 19 March 2024

Bankruptcy and Diligence (Scotland) Bill - Proposed Amendments

Letter from University of Aberdeen, 19 March 2024

See a full list of Stage 2 correspondence

Bill as amended at Stage 2

Revised Documents (print versions)

Revised Explanatory Notes (324KB, pdf) posted 18 April 2024

Supplementary Financial Memorandum (186KB, pdf) posted 18 April 2024

Supplementary Delegated Powers Memorandum (252KB, pdf) posted 17 April 2024

After Stage 2

Delegated Powers and Law Reform Committee

Meeting on 30 April 2024

Report published on 7 May 2024

The Bill ended Stage 2 on 20 March 2024

Stage 3: final changes and vote

At Stage 3, MSPs can propose further amendments (changes) to the Bill. These are debated and decided on in the Debating Chamber. At this stage, all MSPs can vote on them.  There is then a debate on whether to pass the Bill. If the Bill is not passed, it ‘falls’ and can't become law. 

Documents with the amendments considered at the meeting on 6 June 2024:

Marshalled List of Amendments for Stage 3 (441KB, pdf) posted 31 May 2024

Timed Groupings of Amendments for Stage 3 (334KB, pdf) posted 05 June 2024

Stage 3 Correspondence

The Debt Recovery (Mental Health Moratorium) (Scotland) Regulations 2024

Letter to the Minister for Public Finance, 31 May 2024

The Debt Recovery (Mental Health Moratorium) (Scotland) Regulations 2024

Letter from Alan McIntosh, 23 May 2024

The Debt Recovery (Mental Health Moratorium) (Scotland) Regulations 2024

Letter from the Minister for Public Finance, 17 May 2024

See a full list of Stage 3 correspondence

Final debate on the Bill

Once MSPs have decided on the amendments, they debate whether to pass the Bill.

  • Motion title: Bankruptcy and Diligence (Scotland) Bill
  • Text of motion: That the Parliament agrees that the Bankruptcy and Diligence (Scotland) Bill be passed.
  • Submitted by: Ivan McKee
  • Date lodged: Monday, 03 June 2024
  • Motion reference: S6M-13477
  • Current status: Taken in the Chamber on Thursday, 06 June 2024

Result 109 for, 0 against, 0 abstained, 20 did not vote Vote Passed

See further details of the motion


  • Motion title: Stage 3 Timetable
  • Text of motion: That the Parliament agrees that, during stage 3 of the Bankruptcy and Diligence (Scotland) Bill, debate on groups of amendments shall, subject to Rule 9.8.4A, be brought to a conclusion by the time limit indicated, those time limits being calculated from when the stage begins and excluding any periods when other business is under consideration or when a meeting of the Parliament is suspended (other than a suspension following the first division in the stage being called) or otherwise not in progress:  Groups 1 to 4: 40 mins Groups 5 to 7: 1 hour 30 mins.
  • Submitted by: Jamie Hepburn
  • Date lodged: Tuesday, 04 June 2024
  • Motion reference: S6M-13497
  • Current status: Taken in the Chamber on Thursday, 06 June 2024

See further details of the motion


Parliament decided to pass the Bill

Final version of the Bill

The Bill ended Stage 3 on 6 June 2024

Bill becomes an Act

The Bill was passed on 6 June 2024 and became an Act on 15 July 2024.

Read the Act 

Bankruptcy and Diligence (Scotland) Act 2024