Date lodged: 5 October 2018
To ask the Scottish Government what its position is on whether the current arrangements put in place by the Bankruptcy Act (Scotland) Act 1985 allows for a loophole whereby child maintenance and aliment debts are not protected debts and can therefore be written off.
Answered by: Jamie Hepburn 24 October 2018
Under the current legislation arrears of child maintenance or aliment existing at the commencement of insolvency proceedings will rank with other equivalent debts and will be repaid from any available estate recovered by the trustee. Any balance remaining following the completion of the trustee’s administration is written off. This does not apply where child maintenance arrears or aliment are payable by virtue of a court order and in these circumstances the debt will survive the bankruptcy. An individual declared insolvent is required to meet their on-going liabilities for child maintenance or aliment.
The current arrangements on the treatment of maintenance in bankruptcy were covered in the consultation undertaken prior to the bankruptcy reforms that came into force in April 2015. The consultation responses received at that time supported a continuation of the existing arrangements in relation to the treatment of child maintenance debts. A forthcoming public consultation and policy review focusing on the impact of the 2015 bankruptcy reforms will seek further views on this issue.