The Bankruptcy (Scotland) Amendment Regulations 2024 Island Communities Impact Assessment Screening

Step Two – Gather your data and identify your stakeholders

What data is available about the current situation in the islands?

15. The data available on island communities with respect to statutory debt solutions is limited.

Do you need to consult?

16. The recommendation to amend the mechanism for calculating the prescribed rate of interest was from a stakeholder-led working group formed as part of a three stage wider review of Scotland’s statutory debt solutions. This working group, which included representatives from the advice, creditor and insolvency sectors, considered bankruptcy issues including the prescribed rate of interest.

17. A public consultation completed in October 2022 entitled ‘Scotland’s statutory debt solutions and diligence policy review’ included the proposal to “Reform the basis for the prescribed rate of statutory interest and link this to the Bank of England base rate plus 2% - fixed at the date of bankruptcy”.

How does any existing data differ between islands?

18. Given the above-mentioned difficulties obtaining data it is not possible to identify any differences.

Are there any existing design features or mitigations in place?

19. The order of priority of distribution of the estate, including interest on creditors’ claims, is laid out in the 2016 Act and applies to all bankruptcy cases irrespective of the location of the party who is bankrupt or of their creditors. The provisions within this instrument will therefore amend legislation which will apply equally to all parties and will not be different between the island communities and the rest of Scotland.