Scots that are experiencing “unsustainable” debts as a result of the Coronavirus pandemic, stand to benefit from the emergency laws being lodged at Holyrood.
Around the country, a lot of Scots are facing financial uncertainty due to their workplaces being closed down. Additionally, about 80% of employees that are covered under the Government’s Employment Retention Scheme and Universal Credit are experiencing persistent delays when trying to access financial aid.
The Coronavirus (Scotland) (No.2) Bill essentially intends to raise the minimum debt level to £10,000. This will be the new minimum amount that a debtor should owe a creditor before they are declared bankrupt, thereby acting as a debt help Scotland.
Other elements of the law include a proposition for an extra £19.2 million to be invested into the Carer’s Allowance Supplement. Also, students residing in halls of residence or purpose-built student accommodation centers to have a notice to leave period as well as extra protection for people facing bankruptcy.
According to Scotland’s Constitution Secretary Michael Russell, the bill will be an addition to the emergency measures that have already been approved by the Scottish Parliament as it will assist a lot of people facing bankruptcy.
He also added that the bill gives Scottish Ministers the power to reduce non-domestic rates payable during the 2020-2021 period as well as being able to introduce a variety of changes that will be key to supporting the continued operation of public services, especially during these exceptional times.
The Constitution Secretary further mentioned that they have been trying to reach a consensus throughout the crisis period and intend to continue working on a cross-party basis for the government to be able to come up with necessary initiatives that would assist Scotland endure the prevailing extraordinary circumstances.
The upper threshold for the accessibility to minimal asset process (MAP) will also be raised to £25,000 by the legislation. This means that people in debt will be able to avoid a lengthy and costly bankruptcy process.
A spokesperson for leading Scottish debt consultants, Scottishtrustdeed.co.uk, said ‘upping the threshold for the Minimal Asset Process will give some much needed relief to those wouldn;t usually have qualified and means they have more options available to them other than Bankruptcy. Unfortunatley bankruptcy still carries a long lasting social stigma and most people will always want to find an alternative.’
Last month, a coronavirus emergency bill was passed at Holyrood that gave debtors protection from creditors for six months to allow them to think through their options. This week, the bill will undergo a fast-track scrutiny process by MSPs for it to presented in its final form next week at Holyrood.