As many people wake up to the true cost of their Christmas and New Year celebrations, a new scheme to provide last ditch relief for the worst off in society has been announced by Scottish Government minister Fergus Ewing.

The new scheme – set up on the advice of an expert working group on debt relief – will be available to those with a weekly income of less than £220 and no assets worth more than £1,000 and will allow them to be declared bankrupt for the minimal cost of £100.

The Scottish government will lay regulations provided for by the Bankruptcy and Diligence Act 2007 to bring in the Low Income Low Asset scheme to let the Accountant in Bankruptcy provide this service.

Minister for Community Safety Fergus Ewing said, “There are people across Scotland who simply see no way out of the debt they are in.

“When people are earning under £220 pounds a week and the bills and demands keep coming through the letter box they need a realistic low cost way out.

“Bankruptcy is not an easy option.  In itself has longer term consequences that should be carefully considered before application.

Yvonne Gallacher, Chief Executive of Money Advice Scotland , said,  “We are pleased that Government has listened to the advice sector, who have a wealth of experience in dealing with individuals in society who presently cannot access a bankruptcy route, due their status.”

Kalian Lyle, Chief Executive Officer of Citizens Advice Scotland, said, “We have long argued for the need for more effective debt relief for those on the lowest incomes.  We very much welcome this new scheme, which helps address this issue and provided hope for those trapped in unserviceable debt.”