LAST WEEK, the Bankruptcy and Diligence (Scotland) Bill completed its stage 2 consideration in the Scottish Parliament.

While the Bill makes some useful technical amendments to bankruptcy law, sadly it looks set to become another missed opportunity to help Scots with mental health and complex debt problems.

The Bill is fairly short at 13 sections and has taken several years in planning, yet its flagship “mental health moratorium” is a brief enabling provision.

That means it contains no meaningful detail on how the new breathing space would operate.

The Scottish Government appear set on restricting it to those with health issues subject to compulsory mental health treatment, which would mean its impact would be limited.

The Parliament’s Economy and Fair Work Committee has called on the government to expand eligibility criteria. So far, there appears no appetite to do so.

Recent research by Citizens Advice Scotland suggested almost one in five adults got into debt last year and found money problems were exacerbated due to the cost of living crisis.

The majority of people said debt had adversely impacted on their mental health.

Perhaps the most curious aspect of the Scottish Government’s Bill is it does next to nothing to help with the cost of living crisis.

Some politicians have suggested the cost of living crisis is nearing an end because inflation is down from 11% in 2022 to 3.4% last month. Lower inflation doesn’t mean prices are falling, it means they are rising less quickly.

There are some very simple things the Scottish Parliament could do to help Scots with mental health and debt problems.

There were over 230,000 charges for payment served by sheriff officers for council tax arrears in 2021/22. Each charge costs £86 to serve.

In the same year, 53,695 earning arrestments were executed by sheriff officers for council tax and 201,655 bank account arrestments.

That’s over £41 million in sheriff officer fees, excluding VAT. If local councils were empowered to serve these legal documents by registered post at a cost of £10, the debts of people in council tax arrears could be reduced by up to £36m per annum.

In November 2022, the minimum protected balance for bank arrestments was increased from £566 to £1,000, which meant only money over £1,000 in a debtor’s current account could be seized by creditors.

For earnings arrestment, the minimum protected balance for a month’s wages is £655. There is no good reason why this sum should not be raised to £1,000 per month to align with the existing position for bank accounts.

Such a measure would be fair and consistent and give cognisance to the impact of cost of living price rises in relation to wages, which for many Scots have remained static or with modest increases.

At the moment, debtors in bankruptcy are subject to a four-year payment period in Scotland, while the rest of the UK has a three-year period.

Scotland had a three-year period until a change in 2015. There’s no evidence that change has been helpful and we ought to return to the previous rule.

The Bill can remain a damp squib; a mouse that squeaked. Or perhaps MSPs will use the stage 3 final consideration of the Bill next month to make it relevant to tens of thousands of Scots?