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14 Int'l Insolvency Rev. 1 (2005)

handle is hein.journals/intvcy14 and id is 1 raw text is: 








          Forgiving our Debtors: a Scottish

 Perspective on a Fresh Start for Debtors*


                        Donna W McKenzie Skenet

                    Senior Lecturer, School of Law, Universiy of Aberdeen, UK


                                     Abstract

Against a background of rising debt levels, this article examines the range of solu-
tions available to a debtor in financial difficulty in Scots law and the recent propo-
sals for reform of bankruptcy law in Scotland brought forward by the Scottish
Executive as part of its new approach to debt management and enforcement in
Scotland and considers the extent to which they may accord an over-burdened
debtor the opportunity for a fresh start. It concludes that while the emphasis on pro-
viding appropriate solutions for over-burdened debtors with a view to enabling
them to make a fresh start evidenced by these proposals is to be welcomed, they
may not yet have struck quite the right balance in this respect. Copyright G 2004
JohnWiley & Sons, Ltd.

                                I. Introduction

As the Scottish Executive stated simply in its consultation paper Personal Bankruptcy
Reform in Scotland. A Modern Approach, published in November 2003 (the First
Consultation Paper), [d] ebt is a common feature of modern life1 There has, how-
ever, been growing concern recently about rising debt levels and over-indebtedness,
particularly among consumer debtors.2 Recent research indicates that household
debt in the UK and within Scotland is at record levels both in absolute terms and
relative to income.3 Debt is not, of course, the same as over-indebtedness and is
only a problem    where people cannot meet their repayments4 and the First
Consultation Paper noted that most people incur debt through their everyday
*This article is based on a paper delivered at the INSOL Academics' Group Meeting in Cape Town, 2-4 April
2004. The author is grateful to the British Academy for a contribution towards the travelling costs of attending
that Meeting to give the paper.
tE-mail: d.w.mckenzie @abdn.ac.uk
1. First Consultation Paper, para 2.1.         Scotland, On the Cards: The debt crisisfacing Scottish CAB
2. See, for example, Report of the Task Force on Tackling  clients (January 2004).
Over-indebtedness (July 2001); Over-indebtedness in  3. Scottish Economic Report, Ch. 4. See also On the
Britain: A report to the Department of Trade and Industry  Cards: The debt crisis facing Scottish CAB clients paras 3
(September 2002); SecondReport ofthe TaskForce on Tack-  (overall level of debt) and 53 55 (debt to income
ling Over-indebtedness (January 2003); Scottish Economic  ratios).
Report (February 2003), Ch. 4; Citizens Advice  4. Scottish Economic Report, Ch. 4.
Copyright ( 2004 John Wiley & Sons, Ltd.                  Int. Insolv. Rev., Vol. 14:1 26 (2005)
                                       Published online 29 November 2004 inWiley InterScience
                                              (www.interscience.wiley.com). DOI: 10.1002/iir.122

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