The first personal insolvency law unit in Scotland is to be set up by Govan Law Centre.
Opening on 11 July, the pilot project will provide both first and second tier specialist insolvency advice and representation to consumers, and front line, free advisers for clients struggling with debt. This includes those who are already in a personal insolvency or formal debt remedy in Scotland, those considering entering a personal insolvency remedy or being made bankrupt by a creditor, and those who have been in a protected trust deed or been made bankrupt before in Scotland.
Alan McIntosh, the unit's project manager, explained: "The unit is coming along at a vital time for Scotland, as although personal insolvency is currently at a 14-year low, we can expect numbers to being rising again as consumer debt levels increase.
“In that environment, with many advice agencies like citizens' advice bureaux and local authorities suffering cuts to their funding, we need to ensure there is a service where people can access specialist advice – not only as to when insolvency may or may not be the correct option for them, but also in relation to defending bankruptcy actions raised against them, as the consequence of this can often be families losing their homes.”
He commented: “Scotland’s bankruptcy laws have also gone through seismic change over the last 15 years, meaning they now impact on more people’s lives, with over 150,000 people in Scotland using a form of insolvency since 2008, but also the remedies are more accessible and this means the risks of people using the wrong solution have increased.
“This risk has also grown with the removal of the courts from the process, which although generally is to be welcomed, does mean people need to step cautiously so they don’t casually walk into a formal remedy without first taking specialist advice.”
Govan Law Centre's principal solicitor Mike Dailly added: "GLC's board believes there is a massive unmet legal need across Scotland for specialised insolvency advice – ultimately to ensure that people access the very best solution to meet their own particular needs and to protect their homes, whether that solution is through the Debt Arrangement Scheme, a negotiated settlement, trust deed, or sequestration. We are very proud and delighted to be launching this essential service".