Meeting of the Parliament 06 February 2024
I remind members of my entry in the register of members’ interests: I am a member of the Law Society of Scotland, albeit not currently practising.
I echo the committee convener’s thanks to all those who gave evidence to the committee about the bill and I thank the Scottish Parliament information centre for its helpful background briefings and the committee clerks for their assistance during the preparation of our report. That report was agreed unanimously and there is very little political disagreement between committee members regarding our approach to the bill.
I am something of a veteran of committee consideration of bankruptcy legislation in this Parliament. In session 2, I sat on the committee that scrutinised the Bankruptcy and Diligence etc (Scotland) Act 2007 and, in session 4, the subsequent Bankruptcy and Debt Advice (Scotland) Act 2014. Here we are with yet another piece of bankruptcy legislation, which seeks to improve and update the law in an area where there is always a need for change.
Before I come to the detail of the bill that is before us, it is worth taking a moment to reflect on the wider policy background to bankruptcy law. The term “bankruptcy” is normally seen as a pejorative one, carrying negative connotations. Someone who is described as a “bankrupt” is often seen as having failed because they have not been able to meet their financial obligations. In reality, bankruptcy should be seen as something positive. Bankruptcy exists to provide both protection for individuals who fall into debt and relief from those debts. If the option of bankruptcy did not exist, people who find themselves in a situation where they have run up too many debts would never be able to escape and would be pursued indefinitely by their creditors. They would never have the chance to wipe the slate clean and start afresh.
That is what bankruptcy provides. Individuals can declare that they are unable to meet their financial obligations, a trustee will be appointed to administer their affairs and agree settlements with creditors and, after a set period of time—which stands at one year, in our current law—the debtor will be deemed to be free of those debts and able to resume control of his or her financial affairs. It is an acceptance in law that people make mistakes in life, that businesses sometimes fail, that no one should be permanently punished for that and that everyone deserves a second chance.