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A further patient in Scotland has returned a negative test for the new strain of coronavirus.

An update from the Scottish government has confirmed that a total of seven people have been tested for the disease, which is thought to have originated in Wuhan, China.

At least 70 people have been checked for the virus in the UK, although no case has been confirmed.

The number of people killed in China by the virus is 81.

Labour MSP Daniel Johnson will ask the Scottish government what preparations and provisions it is making in response to the coronavirus outbreak in China.

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This week's time for reflection comes from Mr Stephen Stone, head teacher at St Roch’s Secondary School, Glasgow and with the Vision Schools Scotland Programme.

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2.05pm: Topical questions: The first question will call for details of the Scottish government preparations in response to the coronavirus outbreak in China.

The second question asks about the first minister's Scottish visa proposal.

2.20-2.50 pm: Ministerial Statement: Queen Elizabeth University Hospital Oversight Board Update

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2.50-5pm:Scottish Government Debate: Holocaust Memorial Day 2020 – 75th Anniversary

5pm:Members’ Business: Sandra White – Alasdair Gray, a Creative Force

SNP MSP Richard Lyle says: "This whole system is not working, has to be reviewed."

Mr Holmyard replies: "We need a review of all the statutory debt solutions."

Mr Kilgallon adds that the statutory options have been "tweaked and changed" for as long as he has been a debt adviser, but this has not being good enough because people are still not getting the service they need.

The session draws to a close.

Green MSP Andy Wightman asks what is going on in Scotland to make matters worse here than elsewhere.

Is it more indebtedness or less advice being available, he wonders.

Mike Holmyard says when local authorities are strapped for cash, debt advice becomes an area which they cut back on and there has been a 40% reduction in services.

Debt advice from local authorities is less common in England, he adds, pointing to other funding mechanisms.

Ms Hamilton says all of the cards are in the trustee's hands and the debtors are on the back foot.

She calls for an automatic discharge if the trustee can't prove the debtor has not co-operated.

There is an onus of evidence on the debtor here to prove that their situation has changed and they can't continue, elucidates Ms Hamilton.

Image source, Mums out of Debt

Mike Holmyard says not all firms can give the full breadth of advice because they are not regulated to provide some of it.

Anna Hamilton says "there is something quite cloaked" about the advertising of trust deeds, with pushed advertising on Facebook.

She says for example one of the client cases she looked at was "pushed at Mums out of Debt and the entire website is geared towards your children will get much more from you, you'll be a better parent".

There's also a Dads Out of Debt and there are some really strange things that allow people to be targeted in this way, she adds.

If you want to give advice in Scotland you should have to give advice on all the options, says Ms Hamilton.

Green MSP Andy Wightman asks where the advice is coming from to get people to enter a trust deed when they should not.

Mr Kilgallon says the primary concern is to fix the mess the client is in, but adds it is important to find the source of this "dangerous" advice.

The lead generators do not provide any advice, they generate a lead for insolvency practitioner, points out Mr Wightman.

Mr Kilgallon criticises the lead generators for creating false hope via cold calling people who are at their lowest point who are then giving untruths or indeed lies.

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Mr Kilgallon says if there is an estate the amount paid could be far more than the original debt.

Someone could lose a loved one and then their home after the trustee has paid more than the sum of the debt, he explains, calling for fundamental change.

Anna Hamilton from Citizens Advice Edinburgh stresses the importance of people being made aware of the trust deeds process.

"There is a place for a version of trust deeds, but I don't think this version is ideal."

Mr Russell agrees and says there are currently some abuses.

SNP MSP Colin Beattie asks what happens to protected trust deeds if someone dies before completion.

A claim is made on the person's estate replies Mr Holmyard, so the trust deed is paid in full, plus interest and the insolvency practitioner's fees.

He points to further unfairness in the system around trust deeds.

Asked for an example, he cites the case of a female employee of Glasgow Council entering into a trust deed who then received a lump sum from her employer. When she attempted to pay off what she thought was her debt, the trustee found out about the lump sum payment and demanded £12,000 more, he tells MSPs.

Mr Kilgallon criticises money going to "fund the lead generators pocket", in some cases up to £1,500 for effectively cold-calling people in the most dire need.

He says he sees people who are suicidal sometimes who will sign up to anything they are offered.

The City of Edinburgh Council representative points out where trust deeds badly fail, the situation becomes worse and he cannot help them as a legal document has been signed.

He adds the correct level of advice should be provided for trust deeds and significantly more funding is needed to address this and provide for more money advisers.

Anna Hamilton says there is "no way" the money advice sector would be able to take on advice around trust deeds due to limits on resources.

Labour MSP Jackie Baillie highlights suggestions that protected trust deeds should be FCA regulated, insolvency practitioners should banned from accepting paid referrals and there should be informational guidance available around them.

The FCA is the Financial Conduct Authority, the financial regulatory body.

Mike Holmyard says there is an official document, the Debt Advice and Information Package, external, which exists but is not particularly helpful and basically suggests people seek advice.

The Debt Advice and Information Package (DAIP), external is a booklet providing information for debtors to help them deal with their creditors.

Regulation by the FCA would be a positive step but I don't know why they are in the market at all, he adds.

I would question the value of lead generators in this process, he says.

SNP MSP Richard Lyle asks if fees should be regulated and paid 50:50 to the organisation and the creditors at the same time.

Anna Hamilton from Citizens Advice Edinburgh says she is concerned about debtors not being recommended the best product.

Mr Kilgallon agrees that as a debt adviser his concern is the debtor and the potential to safeguard a client's home must be a priority.

Mr Kilgallon says the primary concern for people is whether they will lose their house.

Bob Russell says for many protected trust deeds are not viable, not sustainable and should never have been an option.

He adds many people have to come back to file for bankruptcy, which should have been the first option.

Mike Holmyard from Citizens Advice Scotland says: "We're not here to bury trust deeds. We realise they have a place."

However the issues at the edges of trust deeds must be firmed up with and be addressed, he adds.

Lee Kilgallon says Edinburgh Council has gone from 19 debt advisers to six and he adds trust deeds must always have a place.

Mr Kilgallon does ask if people are getting the full picture when they sign trust deeds.

When trust deeds fail it tends to be difficult, because "when we do see them fail, they tend to fail really, really badly," he adds.

The committee has agreed to carry out a short inquiry on Protected Trust Deeds (a bankruptcy-related statutory debt solution).

This follows on from concerns raised during its recent scrutiny of the Debt Arrangement Scheme (Scotland) Regulations 2019 (DAS).

Witnesses were concerned that PTDs were being heavily marketed and recommended to people in situations when they were not the best debt solution.

One debt adviser said: “We see them being mis-sold time and time again” and the Association of British Credit Unions described them as “one of the biggest issues facing our sector over the past few years”.

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The Committee’s view on DAS was that debt services should be offered on the basis of an informed understanding of the client’s financial circumstances and best interests.

The Committee wants to hear the views of people living with debt and who have experience of PTDs, as well as from debt advisers and creditors.

Remit of the inquiry

To ascertain the benefits and disbenefits of protected trust deeds as a viable debt solution in the interests of people in debt and their creditors and recommend if and how the Scottish Government and Accountant in Bankruptcy should proceed in any reform of the scheme.

• Read the call for written views, external
• Read the written submissions, external