Bankruptcy and Attachment (Miscellaneous Amendment) (Scotland) Regulations 2026: island communities impact assessment

Step One – Develop a clear understanding of your objectives

What are the objectives of the policy, strategy or service?

The main objective of these Regulations is to increase the level of assets that are exempt under bankruptcy to widen the entry criteria to the Minimal Asset Process (MAP) bankruptcy and to enable individuals to retain more of their possessions in bankruptcy and when subject to debt recovery measures (diligence). The following sections provide a more detailed overview of each provision and their intended objectives.

Bankruptcy and diligence

The Bankruptcy (Scotland) Act 2016 (the “2016 Act”) and the Debt Arrangement and Attachment (Scotland) Act 2002 (the “2002 Act”) specify items up to certain values which do not vest in a trustee in a bankruptcy or cannot be attached in diligence. Some of these values have not been changed for a significant number of years and have not kept pace with the economy. These Regulations will therefore increase the value of the following items, which enable individuals with financial problems to retain a greater amount of their possessions.

There are two types of bankruptcy in Scotland – MAP bankruptcy and Full administration bankruptcy.

MAP bankruptcy is a shorter, cheaper and less intrusive process for individuals who have limited assets and are in receipt of certain prescribed payments (for example, certain benefits) or have insufficient income to make a contribution to their bankruptcy. The alternative Full administration bankruptcy is a longer more expensive process for those with more significant debts, assets that can be sold, and/or an ability to make a monthly financial contribution to their bankruptcy.

The 2016 Act also sets the criteria which must be met to enable an individual to enter MAP bankruptcy. Some of these criteria are currently excluding people from entering MAP bankruptcy when it is the best solution to deal with their debt. Therefore, the following will be amended to widen the criteria and allow a greater number of people access.

There have been differing opinions on the classification of mobility scooters and whether they were therefore excluded from the entry criteria into MAP bankruptcy, from vesting in a trustee in bankruptcy or from attachment in diligence. The Scottish Government committed to ensure that mobility scooters (known as invalid carriages in the Regulations) were excluded and these Regulations will put the position beyond doubt.

Method of communication

The Regulations will also make email the default method of communication between the Accountant in Bankruptcy (AiB) and the individual during the administration of their case, unless the individual requests or requires an alternative communication method. This will make the communication process quicker, more efficient and cost effective for both parties.

Other amendments

The Regulations will also make the following amendments:

• amend the common financial statement (CFS) provisions in the Bankruptcy (Scotland) Regulations 2016 (the “2016 Regulations”) to replace reference to the Money Advice Trust (MAT) with AiB reflecting AiB’s position on maintaining the CFS.
• insert a missing word “of” in section 147C(1)(b) the 2016 Act.
• update prescribed forms in the 2016 Regulations to reflect changes to the MAP entry criteria and the method of communication.

Do you need to consult?

The recommendations that led to the bankruptcy and diligence provisions in the Regulations originated from a wider review of Scotland’s statutory debt solutions together with a separate review of diligence. The stakeholder-led working groups involved in these reviews included a wide body of sector specialists with expertise in debt advice, the operation of statutory debt solutions and diligence. There were no concerns raised by stakeholders about any undue impact the provisions would have on the island communities.

The stakeholder recommendations were included in a public consultation completed in October 2022 entitled ‘Scotland’s statutory debt solutions and diligence policy review’. Responses to this consultation did not raise any concerns that the proposed amendments would have any undue impacts on the island communities.

The third stage of the review (the “MacDermid review”) of Scotland’s statutory debt solutions was conducted independently of the Scottish Government. This involved a call for evidence, a public consultation and two nationally representative surveys. A final report of recommendations was published in March 2026. No concerns were raised on any undue impact on the island communities.

Stakeholders have been involved throughout the review of Scotland’s statutory debt solutions and diligence. The Minister for Public Finance has chaired meetings of a Stakeholder Working Group on Scotland’s statutory debt solutions and the proposals were shared with them and were amended following these meetings and subsequent discussions with stakeholders.

There has been no formal consultation on making email the default method of communication and it is not considered that consultation is required. There is currently a requirement for the individual who is applying for bankruptcy to indicate their preferred communication method which includes the option of email. While the objective is to make email the default, there remains the option for the individual to request a different communication method if they do not want to or cannot communicate by email. It is not considered therefore that this provision will have an undue impact on island communities.

What are the intended impacts/outcomes and how do these potentially differ in the islands?

The current threshold for the value of a car that does not vest in the trustee in bankruptcy is £3,000. This was introduced by regulation 4 of the Bankruptcy (Scotland) Amendment Regulations 2010 (SSI 2010/367). The policy intention of this provision was to recognise the reasonable need for cars in rural and remote areas of Scotland (Official Report, Local Government and Communities Committee, 11 November 2009, col. 2663).

Consideration was given to whether the remoteness of properties and the road infrastructure on some islands would reasonably require an individual to own and use and therefore retain a larger, higher value motor vehicle. Consequently, the Regulations significantly increase the value of vehicles that can be retained. This increase will benefit all debtors as well as those on island communities. This reflects a recommendation made by the MacDermid review of statutory debt solution (March 2026, recommendation 14).

The bankruptcy and diligence provisions in the instrument are also intended to enable more individuals with problem debt to enter MAP bankruptcy and increase the value of items which are excluded from vesting in a trustee in any bankruptcy or from attachment in diligence. They will enable people with debt to retain a greater amount of their possessions and will apply to all individuals irrespective of their location.

The provisions are also intended to make email the default communication method between AiB and the individual during their bankruptcy. It is recognised that internet infrastructure may be limited on some islands but there will also be similar situations in parts of the mainland. There may also be instances on some islands and parts of the mainland where email is a faster, more efficient and reliable method of communication than traditional mail. While the aim is to make the default method of communication email, the overall position and impact on individuals, wherever they are situated will not change. There is currently the ability for the individual to select the method of communication which suits their personal circumstances, and this is being retained. We do not consider therefore that this provision will differently affect those on island communities.

There are some minor amendments to legislation in relation to the CFS, prescribed forms, and the insertion of a missing “of” in section 147C(1)(b) of the 2016 Act. These changes will have a limited impact on individuals and where they do, they would apply equally irrespective of location and will not differently affect those on island communities.

Is the policy, strategy or service new?

The provisions in the Regulations are not a new policy, strategy or service but rather an update to values and references in current legislation and prescribed forms.