This site uses cookies; by continuing to use our site you agree to our use of cookies. More details in our privacy policy. Close



New Scottish regulations address dire creditor returns 27 September 2013

The Scottish Government is to introduce new regulations aimed at improving creditor returns, following the publication of statistics showing zero dividends paid following a high number of personal insolvencies.

It has raised concerns over the “transparency” of some protected trust deeds (PTD) – a statutory debt solution which has been widely promoted in the media and online – as well as over high costs and their impact on returns to creditors.

The announcement follows recent data from the Accountant in Bankruptcy’s Annual Report 2012-13 showing that over one third of all PTDs pay no dividend to creditors as a result of increasingly high costs.

One firm on the table completed a total of 268 PTDs during the period under review, with zero dividends paid to creditors in 97% of those cases

Minister for energy, enterprise and tourism, Fergus Ewing MSP said: “The Scottish Government is concerned that the costs of protected trust deeds, which should be a way of helping people clear their debts and seeing creditors receive their money back, are increasing by more than 25%.

“The latest figures show this is happening in up to 84% of cases. At the same time some trustee fees have also increased by 25% over the same period.

“The changes we propose should lead to an improvement in dividends paid and by taking steps to freeze equity we will offer better protection for those who are trying to clear their debts.

“If these changes don’t lead to increased performance or increased dividends then we will consider further action”.

The new regulations will aim to ensure that the process and expected outcomes regarding PTDs are clear and transparent to all debtors and creditors, as well as introducing a freeze on equity which will further protect debtors entering a PTD.



blog comments powered by Disqus