The Accountant in Bankruptcy AiB Stakeholder Events 2012.
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Transcript of The Accountant in Bankruptcy AiB Stakeholder Events 2012.
The Accountant in Bankruptcy
AiB Stakeholder Events 2012
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
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
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”
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
Stakeholder Events | Rosemary Winter-Scott | Dec 2012
3. AiB Updates
• AiB Senior Management Team
• IIP Gold
• NACAB Adviser
• IAIR
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
Stakeholder Events | Rosemary Winter-Scott | Dec 2012
Investors in People Gold
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]
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
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
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
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
Rosemary Winter-ScottThe Accountant in Bankruptcy & Agency Chief ExecutiveT: 0300 200 2901 E: [email protected]