The Accountant in Bankruptcy AiB Stakeholder Events 2012.
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Transcript of The Accountant in Bankruptcy AiB Stakeholder Events 2012.
![Page 1: The Accountant in Bankruptcy AiB Stakeholder Events 2012.](https://reader031.fdocuments.in/reader031/viewer/2022020417/56649f135503460f94c27e7a/html5/thumbnails/1.jpg)
The Accountant in Bankruptcy
AiB Stakeholder Events 2012
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
Content
1. AiB Mission and Functions
2. Volumes of Activity & Trends
3. Updates
4. Workshop Topics
5. Engaging with AiB
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
1. The Accountant in Bankruptcy (AiB)
Mission:
To ensure access to fair and just processes of debt
relief and debt management for the people of Scotland,
which takes account of the rights and interests of those
involved
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
AiB Functions
Recognising our unique role - we achieve this through the following functions:
• Supporting Ministers to develop & refine policy
• Supervising the insolvency process
• Delivering, with stakeholders, a range of options for individuals seeking debt relief and debt management
• Delivering best value public services
By doing so, we will support the Scottish Government’s purpose – “to create a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth”
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
2. Trends in Activity
Based on current levels of activity (9 months to end Dec)
• Predicting in 2012/13 cf 2011/12 -16% (decrease) in Bankruptcies -5% (decrease) in PTDsNet 14% decrease in insolvencies+ 46% (increase) in DAS
• Continued reduction in number of creditor petitions between -12% and -18% predicted
• Rise in marketing from debt management companies leading a take-up of targeted debt solutions rather than advice and a holistic approach
• Ministers increasing concerns about:– Debt management firms– Pay day loans– Day/fee rates of IPs not being proportionate to the
circumstances of the case
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
Debt Arrangement Scheme (DAS)
Debt Arrangement Scheme Review 2012 Review Period - 1 July 2011 to 30 June 2012. http://www.aib.gov.uk/news/releases/2012/11/debt-arrangement-scheme-review-2012
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
DAS – Activity Levels
• Number of DAS DPPs increasing
2009/10 - 1,417 2010/11 - 1,910, 2011/12 – 3,319 (73.7% increase)DPPs Approved by Review Period
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2008/09 2009/10 2010/11 2011/12
Review Period (01 July - 30 June)
Nu
mb
er
ap
pro
ve
d
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
DAS – Activity Levels
DPPs awarded under DAS
0
200
400
600
800
1000
1200
1400
1600
Financial Period
Nu
mb
er
of
DP
Ps
• Within that increase there are quarterly fluctuations
DAS Marketing
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
DAS – Rate of Uptake
• Per 10,000 working age people
• Significant variation at Local Authority level
• The rate in Inverclyde and West Dumbartonshire is almost 6 times that of the Orkney Islands
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
DAS – Duration of Plans
• Previously on average DPPs ran for 8 yrs 5mths• The average length of all DPPs since the Scheme started is 7 years 2
months, to the nearest month. • The average length of DPPs approved in this review period is 6 years 8
months Percentage of DPPs by duration
0
10
20
30
40
50
60
70
0 to 5 5 to 10 10 to 15 15 to 20 20-30 30+
Duration (years)
Per
cen
tag
e
2009/10
2010/11
2011/12
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
DAS – Level of Debt
• Previously on average, debtors owed £24,194• But now the majority of DPPs include debts of less than £25,000• The average debt is now is £18,903 (and median is £12,913)
Percentage of DPPs by debt range
0
10
20
30
40
50
60
70
80
Un
der
£25K
£25K
-£5
0K
£50K
-£7
5K
£75K
-£1
00K
£100
K -
£125
K
£125
K+
Debt Range
Per
cen
tag
e
2009/10
2010/11
2011/12
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
DAS – Age of Debtor
• The proportion of younger debtors has increased • The average age of a DPP debtor is now 44 years, 11 months
Percentage of all debtors named in a DPP by age at entry
0
5
10
15
20
25
30
35
40
0-19 20-29 30-39 40-49 50-59 60-69 70-79 80+
Age range
Per
cen
tag
e
2009/10
2010/11
2011/12
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
DAS – Profile of Payments
• The average monthly payment in a DPP is £238 (slight decrease from previous years)
• 36.4%, pay between £101 and £200 per month in their DPP
• 77.4% of debtors make payments of less than £300 per month Percentage of payments by value
0
5
10
15
20
25
30
35
40
0-£1
00
£101
-£20
0
£201
-£30
0
£301
-£40
0
£401
-£50
0
£501
-£60
0
£601
-£70
0
£701
-£80
0
£801
-£90
0
£901
-£10
00
£100
0+
Value
Per
cen
tag
e
2009/10
2010/11
2011/12
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
DAS – Joint DPPs
• 18% joint DPPs
• 80% Joint applications have debtors with aged 30-59 yrs
• Where as younger applicants tend to be for single DPPsApplication Status
Single, 82.2%
Joint, 17.8%
Percentage of DPPs by age at entry (single/joint)
0
5
10
15
20
25
30
35
40
0-19 20-29 30-39 40-49 50-59 60-69 70-79 80+
Age range
Per
cen
tag
eSingle
Joint
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
DAS – Average total debt by entry age
• Lower levels of debt for younger participants
Average total debt by age
£0
£5,000
£10,000
£15,000
£20,000
£25,000
£30,000
<25 25-34 35-44 45-54 55-64 65+
Age range
To
tal d
ebt
2009/10
2010/11
2011/12
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
DAS – Average payments by entry age
• Debtors over the age of 65 paid the highest average monthly payment (£305) towards their DPP.
• This is £58 more than a debtor aged between 45-54 years of age and £178 more than a debtor under the age of 25
Average instalment by age at entry
£0.00
£50.00
£100.00
£150.00
£200.00
£250.00
£300.00
£350.00
<25 25-34 35-44 45-54 55-64 65+
Age range
Inst
alm
ent
amo
un
t
2009/10
2010/11
2011/12
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
DAS – Overall Summary
• DAS is increasingly being used;
– By younger people
– For those with smaller debts
– For those with joint debts (18%) and those with a single debt 3.4%
– As an early intervention – to prevent insolvency
• It is attracting increased interest from other countries
– As an effective debt management option – rather than debt relief
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
Insolvencies - Activity Levels
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2006 2007 2008 2009 2010 2011 2012 2013projected
Year ended 31 March
Nu
mb
er
of
Aw
ard
s
Bankruptcies Protected Trust Deeds
LILA Introduced 1 April 2008
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
Insolvencies
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500Q
1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
2008/09 2009/10 2010/11 2011/12 2012/13
Nu
mb
er
of
Ind
ivid
ua
ls
Sequestrations Protected Trust Deeds
LILA introduced on 1 April 2008
Certificate introduced on 15 November 2010
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
Bankruptcy (Sequestration)
• Three routes
– LILA – Low Income Low Asset
– Apparent Insolvency
– Certificate for Sequestration (came into force on 15 November 2010)
• At the end of Q1 this year 2,916 bankruptcy awards had been made using the Certificate for Sequestration
• Of which - trustee breakdown is AiB 39% Private trustee 61%
Debtor Applications Awards Breakdown
1564 54%965
33%
38713%
LILA
Certificate
Apparent Insolvency
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
Developing a Vision for the 21st Century
A “Financial Health Service” for debt advice, debt management and debt relief which:
• Ensures access to fair and just processes of debt relief and debt management
• Supports the principle that those debtors who can pay should pay their debts
• Acknowledges the wide range of circumstances and events that contribute towards bankruptcy for individuals and businesses
• Secures the best return for creditors – ensuring that the rights and needs of those in debt are balanced with the needs of creditors and businesses
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
Bankruptcy Law Reform Consultation
• Initial Consultation:http://www.scotland.gov.uk/Publications/2012/02/628
– Closed on 18th May 2012– 129 responses including 89 organisations
• Summary of responses publishedhttp://www.aib.gov.uk/news/releases/2012/08/bankruptcy-law-reform-consultation-summary-responses
• Government response published 1 Nov 2012:http://www.aib.gov.uk/news/releases/2012/11/scottish-government’s-response-consultation-bankruptcy-law-reform
• Current work– Ongoing stakeholder discussion & specific engagement
with creditors– Drafting of legislation and Regulations
• Bill introduced to Parliament prior to summer 2013
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
3. AiB Updates
• AiB Senior Management Team
• IIP Gold
• NACAB Adviser
• IAIR
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
AIB Senior Management Team
• The Accountant in Bankruptcy &
• Agency Chief Executive – Rosemary Winter-Scott
• Executive Director Corporate Services &
• Assistant Chief Executive – Charles Keegan
• Executive Director Policy and Compliance & Assistant Chief Executive – Claire Orr
• Executive Director Case Operations &
• Deputy Accountant – John Cook
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
Investors in People Gold
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
CAB adviser located in AiB
Ian Brough
Independent CAB Adviser
Located in AiB, 1 Pennyburn Road, Kilwinning
Contact number: 0300 200 2922
e-mail: [email protected]
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
• Members of the IAIR are:– Government Departments/Ministries – Agencies and Public Authorities
• Which have responsibility in their
country for one or more of:– Insolvency Policy & Legislation – Insolvency Practice & Administration – Insolvency Regulation
• Rosemary Winter-Scott elected Chair of
IAIR 2012-2013• Scotland to host its Annual International
Conference and AGM in Edinburgh
23-26th September 2013
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
“5 Nations”
• Regional group of IAIR:– UK Insolvency Service (England & Wales)– AiB (Scotland)– Northern Ireland– Ireland– Jersey
• Regular meetings to share:– learning from the IAIR conference & any study visits– experiences & development
• Last meeting in Nov 2012 - Scotland
• Irish Bankruptcy Reform• Scottish – DAS, contracting, Bankruptcy Reform Bill
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
5. Workshop Topics
• Bankruptcy Law Reform Bill – what will be
included in the Bill and what are the implications?
• Maximising Efficiency - how can new technology
improve the way we work together?
• Operational Update - your opportunity to learn
about AiB's processes and ask us questions
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Stakeholder Events | Rosemary Winter-Scott | Dec 2012
6. Engaging with AiB
Work with us to develop more effective policies for Scotland – A Vision for the service fit for the 21st Century
– Which take account of the rights and interests of all involved
– Importance of ongoing constructive engagement with stakeholders
Participate with us: – Attend the annual Stakeholder events hosted around Scotland
– Call and engage with my staff about any areas of interest
– Invite me/my staff to come out and speak at your events
– Visit our Website – an increasing source of publications & information
– Visit AiB or shadow a member of AiB staff
– Follow us on Twitter @AiB_updates
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Rosemary Winter-ScottThe Accountant in Bankruptcy & Agency Chief ExecutiveT: 0300 200 2901 E: [email protected]