Scottish Law Commission criticised as Draft Bankruptcy Act for Scotland fails to protect weakest victims of debt & insolvency from AIB’s multi million pound sequestration racket

17 May

Scottish Law CommissionMissed opportunity to protect vulnerable Scots from draconian Bankruptcy powers. A REPORT presented by the Scottish Law Commission (SLC) on the Consolidation of Bankruptcy Legislation in Scotland has been branded by critics as a missed opportunity to curb & control the multi million pound sequestration racket in Scotland which sees private firms of accountants gain millions of pounds in little talked about public contracts to go after people who have little or no ability to pay back their debts.

Rather than address the most pressing & critical problems involving sequestrations & bankruptcies in Scotland, which in several cases have seen agents acting for the Accountant in Bankruptcy freezing state disability payments to the long term sick & disabled, the Scottish Law Commission has chosen to fiddle with definitions & semantics of legislation in order to ‘consolidate’ legislation which is currently working as a license for private accountants to print money at the taxpayers expense.

In its official figures published on 24 April 2013, the Accountant in Bankruptcy reported that for the fourth quarter of the financial year 2012-13 there were 3,472 personal insolvencies in Scotland, generating millions of pounds of private contracts handed out to select private firms of accountants.

Diary of Injustice has previously reported on how lavish multi million pound contracts are handed out to accountancy firms by the AIB, here : £8 MILLION of YOUR MONEY spent on ‘BULLY BOY’ agents as papers to MSP reveal Accountant in Bankruptcy secretly seize benefits of disabled, trashing lives of Scots on the brink

Most of the law recommended for consolidation is already contained in the Bankruptcy (Scotland) Act 1985. The 1985 Act has been heavily amended in recent years, most notably by the Bankruptcy and Diligence etc. (Scotland) Act 2007. Many of the provisions of the 1985 Act are excessively long and the structure of the Act has become difficult to follow with the result that the Act has lost coherence.

The Report makes a number of recommendations for amendments to the Bankruptcy (Scotland) Act 1985. The changes relate to matters of technical detail and are intended to remove anomalies, treat like cases in the same way or to omit provisions that no longer serve any purpose.

Annexed to the Report are –

A Bankruptcy (Scotland) Bill to consolidate the legislation;

Tables of Destinations and Derivations relating to the provisions;

A draft Order which we envisage would be made under section 104 of the Scotland Act 1998

and which would give effect to certain provisions of the Bill in other parts of the UK.

The Commission has worked closely with the Accountant in Bankruptcy in producing the Report.

Commenting on the Scottish Law Commission’s report, Lady Clark of Calton, the Chairman of the Commission said : “It is important that the law on bankruptcy should be stated in a clear and accessible form. The existing statutory provisions dealing with bankruptcy are cumbersome and difficult to use. We hope that consolidating the legislation will make it easier and more efficient for practitioners and others to provide advice to people faced with personal bankruptcy”.

Rosemary Winter-Scott, Chief Executive of Accountant in Bankruptcy who has previously refused to answer questions on why her organisation has frozen access to benefits payments to the disabled for up to seven months at a time, said : “We welcome the Scottish Law Commission’s Report on the Consolidation of Bankruptcy Legislation in Scotland. Bankruptcy legislation in Scotland has been heavily amended over the years and the consolidation will ensure that the legislation is more accessible for practitioners and those affected by it. A Bankruptcy Bill is due to be introduced in the Scottish Parliament this summer. We expect the Consolidation Bill to follow after that Bill has completed the parliamentary process. This will bring bankruptcy legislation in Scotland into the 21st century.”

However, a spokesperson for one of Scotland’s consumer organisations told Diary of Injustice she was dismayed the Scottish Law Commission had not taken the opportunity to look deeper into how the Accountant in Bankruptcy has effectively misused its powers to force debt ridden victims into complicated long term repayment deals which are clearly unaffordable and not required in terms of law.

She said : “The Scottish Law Commission is well aware of substantial problems with the application of bankruptcy legislation in Scotland and this would have been a good opportunity to suggest amendments to ensure the weakest in society are protected from actions undertaken by the AIB against persons who are in receipt of disability benefits, actions which are clearly unacceptable in a civilised society.”

More can be read on the Scottish Law Commission’s report on Bankruptcy legislation HERE

With the prospect of new legislation being put before the Scottish Parliament, anyone who has been sequestrated or made bankrupt in Scotland and who has experienced difficulties with the Accountant in Bankruptcy and their agents, are encouraged to write to their MSPs and make submissions to the Scottish Parliament.

If you have encountered problems with the Accountant in Bankruptcy or their agents, Diary of Injustice would also like to hear from you via


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