# My Experience of Bankruptcy in Scotland



## 16then (22 Dec 2014)

My wife and I have been lurkers on here for the past year. 

I moved to Scotland with my wife and two small kids in July this year and was made bankrupt in the past couple of months. 

I've been blogging a little about my experience, thoughts and emotions over the past 6 months here www.16then.com

I had no idea how it would be or if I would keep it up when I started, it has been great for getting my thoughts straight at times.  Given the time of year, there might be some people out there considering their options. 

If you read, let me know what you think. 

If not, Happy Christmas.


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## Jim Stafford (22 Dec 2014)

16then

Your comments below from your blog are the most poignant that I have ever read on this forum:

*This week I spent some time with my wife’s family for a wedding, they are the great bunch, very close,  some of the only people who know her as well as I do. She has a big heart, there was a lot of love there on both sides.*
*I looked over at her in her red dress thinking if I wasn’t married, I’d ask her to marry me and I wonder could I convince her to say yes.*

Your blog captures many of the emotions that people seeking a solution go through.

By the way, your timing for bankruptcy in Scotland is perfect, as new legislation will be enacted early next year which will bring the Scottish experience closer to the Irish experience.  The preferred UK destination for bankruptcy will now be England & Wales.

Best of luck.

Jim Stafford


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## 16then (22 Dec 2014)

Thanks Jim.

It was hard pushing publish on that one.


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## epicaricacy (23 Dec 2014)

Really interesting Blog. Thanks for sharing. Agree with Jim Stafford about your timing being spot on as the new legislation makes Scotland's Insolvency system less appealing than England / Wales. 
Well done again!!!


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## IB2013 (26 Dec 2014)

Jim Stafford said:


> 16then
> 
> 
> 
> ...




Hi Jim,


Hope you are enjoying the break. I noticed your comment above regarding the proposed changes to the Scottish system and have to take issue with what you said.

Firstly, we spoke to the AIB (Scottish Insolvency Service) last week and they told us that the proposed changes will not be coming into effect as originally proposed in April 2015. I am sure your affiliates in Scotland can confirm this. They will be applied “later in the year” but as of now, AIB do not know when.

As I said when we met recently, we have an Insolvency Practitioner in Glasgow with over 30 years’ experience who has dealt with thousands of cases. When I spoke to him about the effect of the proposed changes in the system he believes that their impact will be far less that you seem to think.

As he sees it, the 2 main changes relate to payment orders and inheritances. As of today, approximately 20% of bankruptcies result in a payment order. In the case of inheritances, the figure is less than 5%. Therefore it can be seen that the vast majority of cases will not be affected by the changes. However, for anyone who might be impacted by the changes they will obviously need to factor them into their decision and look at the alternatives.

The existing benefits of Scottish bankruptcy will still hold true, e.g. no Court appearance, lower administration fees and a shorter COMI than in England/ Wales. Bankruptcy will still last 12 months, so to say that the Irish and Scottish systems are comparable is simply incorrect.

As I have always said, there is no one system that will suit everyone, either for personal or financial circumstances. I have never said that Scotland is the only show in town; there are a number of options available to anyone considering bankruptcy. For anyone considering which route to go, do your homework and speak to people dealing with the various options open to you. Doing nothing is not an option.


16then, well done and keep on keeping on! ;-)


Ciarán

[broken link removed]


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## epicaricacy (26 Dec 2014)

Ciaran
The new Scottish legislation states that the OR can re-open bankruptcies post discharge in case of inheritance. Your 5 percent figure is based on the current legislation and will therefore become irrelevant WHEN the legislation comes into force in 2015. It's a statistical certainty that the percentage will dramatically increase.
If one is unlucky to have a Debtor Contribution Order made against you -  as is the case with 20 percent of bankrupts - it will elongate the entire process by at least 4 years and the terms of the DCO (IPO) are much worse than even the Irish system.
One can be in and out in 6 months in England / Wales (whereas you had to stay in Scotland for at least 8 to 10 months).
Eng / Wales. - Many people don't even have to appear before a judge.
Eng / wales -  Vast majority have one telephone conversation with the Official Receiver as is the case in Scotland.
Why would anyone risk the perils of the new Scottish system over the Eng / Wales system to save the 500 pounds court fees? After all -there are no other advantages to the Scottish system.


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## Jim Stafford (2 Jan 2015)

Ciaran

Whilst there may be delays in implementing the new Scottish legislation, it will be implemented at some stage this year.  Once it is implemented, Scotland will simply be a less attractive destination than England & Wales (from a bankruptcy perspective.) Given the uncertainty as to when the new legislation will be actually implemented, we would be slow to advise clients to move to Scotland, as by the time that they establish their COMI they might be caught by the new legislation.

As I have previously posted elsewhere, we are now advising fewer clients to move to the UK due to the passing of the Irish Personal Insolvency Act 2012.  Under the new Act, it is possible for some people to go bankrupt here and retain their family home.

The introduction of PIA's and DSA's has helped introduce a "compromise" culture into the Irish banking sector. Most Irish and foreign banks will now do some type of compromise agreement where it is clear that the level of debt is unsustainable.

Jim Stafford


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## epicaricacy (2 Jan 2015)

Ciaran
I have to agree with Jim S. The sun has set on the suitability of Scottish bankruptcy for Irish people.


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## the_wisdom_of_wilde (27 Feb 2015)

16then said:


> .



Can I ask as I am about to go Bankrupt, would it be better to get a minimum wage job, and would this mean that after a year I wont be contacted to pay for 3 years? 

Cheers, Wilde


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## Margot Tenembaum (27 Feb 2015)

Wilde

It depends on the jurisdiction in which you're petitioning for bankruptcy. The UK has a one year discharge period whereas Ireland has a 3 year discharge period.


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## the_wisdom_of_wilde (28 Feb 2015)

Margot Tenembaum said:


> Wilde
> 
> It depends on the jurisdiction in which you're petitioning for bankruptcy. The UK has a one year discharge period whereas Ireland has a 3 year discharge period.


Thanks, in Scotland you get anb "Attachment" order if you earn enough, am I correct in thinking that I should therefore earn minimum wage for a


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## epicaricacy (28 Feb 2015)

Yes. An 'attachment order' - soon to be known as a debtor contribution order - can be imposed if your income exceeds your outgoings by a sum greater than your outgoings. It's imperative to 'ensure' that your income and outgoings 'match'. Therefore some type of temporary / seasonal, minimum wage work is preferable.


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## Steve Thatcher (2 Mar 2015)

epicaricacy said:


> Yes. An 'attachment order' - soon to be known as a debtor contribution order - can be imposed if your income exceeds your outgoings by a sum greater than your outgoings. It's imperative to 'ensure' that your income and outgoings 'match'. Therefore some type of temporary / seasonal, minimum wage work is preferable.


That is the case wherever you live. You have a chance to arrange it in advance which is what we do for our UK clients. Forewarned is forearmed.
Never pay more than you need to.

Steve


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## the_wisdom_of_wilde (3 Mar 2015)

Steve Thatcher said:


> That is the case wherever you live. You have a chance to arrange it in advance which is what we do for our UK clients. Forewarned is forearmed.
> Never pay more than you need to.
> 
> Steve



So an Attachment Order or Debtor Contribution Order stays in place for how long, if they see they are not going to get anything?


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## Bronte (3 Mar 2015)

the_wisdom_of_wilde said:


> So an Attachment Order or Debtor Contribution Order stays in place for how long, if they see they are not going to get anything?


 
But the order wouldn't be put in place if you weren't able to pay it.


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## the_wisdom_of_wilde (3 Mar 2015)

Bronte said:


> But the order wouldn't be put in place if you weren't able to pay it.


Ah get you, the order is placed IF you earn over minimum wage during the year that you are bankrupt, after you get discharged they CANT place an order. Got it, part time for me :0)


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