Bankruptcy (Scotland) Act 2016

JurisdictionScotland
Citation2016 asp 21


Bankruptcy (Scotland) Act 2016

2016 asp 21

The Bill for this Act of the Scottish Parliament was passed by the Parliament on 22nd March 2016 and received Royal Assent on 28th April 2016

An Act of the Scottish Parliament to consolidate the Bankruptcy (Scotland) Act 1985, the Bankruptcy (Scotland) Act 1993, Part 1 of the Bankruptcy and Diligence etc. (Scotland) Act 2007, Part 2 of the Home Owner and Debtor Protection (Scotland) Act 2010, the Bankruptcy and Debt Advice (Scotland) Act 2014, the Protected Trust Deeds (Scotland) Regulations 2013 and related enactments.

1 Application or petition for sequestration

PART 1

Application or petition for sequestration

Applications and petitions

Applications and petitions

S-1 Sequestration

1 Sequestration

The estate of a debtor may be sequestrated in accordance with the provisions of this Act.

S-2 Sequestration of estate of living debtor

2 Sequestration of estate of living debtor

(1) The sequestration of the estate of a living debtor is—

(a) by debtor application made by the debtor, if subsection (2) or (8) applies to the debtor, or

(b) on the petition of—

(i) a qualified creditor, or qualified creditors, if the debtor is apparently insolvent,

(ii) a temporary administrator,

(iii) a member State liquidator appointed in main proceedings, or

(iv) a trustee acting under a trust deed if a condition mentioned in subsection (7) is satisfied.

(2) This subsection applies to the debtor where—

(a) the debtor—

(i) has been assessed by the common financial tool as requiring to make no debtor’s contribution, or

(ii) has been in receipt of payments, of a kind prescribed, for a period of at least 6 months ending with the day on which the debtor application is made,

(b) the total amount of the debtor’s debts (including interest) at the date the debtor application is made is—

(i) not less than £1,500 or such other amount as may be prescribed, and

(ii) not more than £17,000 or such other amount as may be prescribed,

(c) the total value of the debtor’s assets (leaving out of account any liabilities) on the date the debtor application is made does not exceed £2,000 or such other amount as may be prescribed,

(d) no single asset of the debtor has a value which exceeds £1,000 or such other amount as may be prescribed,

(e) the debtor does not own land,

(f) the debtor has been granted, within the prescribed period and in accordance with section 9, a certificate for sequestration of the debtor’s estate,

(g) in the 10 years ending on the day before the day on which the debtor app lication is made or such other period as may be prescribed, no award of sequestration has been made against the debtor in pursuance of an application made by the debtor by virtue of this subsection, and

(h) in the 5 years ending on the day before the day on which the debtor application is made, no award of sequestration has been made against the debtor in pursuance of—

(i) an application made by the debtor other than by virtue of this subsection, or

(ii) a petition.

(3) For the purposes of subsection (2)(c) and (d)—

(a) any property of the debtor is not to be regarded as an asset if, under any provision of this or any other enactment, it would be excluded from vesting in AiB as trustee,

(b) if the debtor reasonably requires the use of a vehicle, any vehicle owned by the debtor the value of which does not exceed £3,000 or such other amount as may be prescribed is not to be regarded as an asset, and

(c) any other property of the debtor that is of a prescribed type is not to be regarded as an asset.

(4) For the purposes of subsection (2)(c) and (d), the Scottish Ministers may by regulations make provision about how the value of the debtor’s assets is to be determined.

(5) The Scottish Ministers may by regulations modify subsection (2).

(6) Schedule 1 makes further provision about the application of certain provisions of this Act in relation to a debtor to whom subsection (2) applies.

(7) The conditions mentioned in subsection (1)(b)(iv) are—

(a) that the debtor has failed to comply—

(i) with an obligation imposed on the debtor under the trust deed, being an obligation with which the debtor reasonably could have complied, or

(ii) with an instruction reasonably given to, or requirement reasonably made of, the debtor by the trustee for the purposes of the trust deed, or

(b) that the trustee avers in the trustee’s petition that it would be in the best interests of the creditors that an award of sequestration be made.

(8) This subsection applies to the debtor where—

(a) the total amount of the debtor’s debts (including interest) at the date the debtor application is made is not less than £3,000 or such sum as may be prescribed,

(b) an award of sequestration has not been made against the debtor in the 5 years ending on the day before the date the debtor application is made,

(c) the debtor has obtained the advice of a money adviser in accordance with section 4(1),

(d) the debtor has given a statement of undertakings (including an undertaking to pay to the trustee, after the award of sequestration of the debtor’s estate, an amount determined using the common financial tool), and

(e) the debtor—

(i) is apparently insolvent,

(ii) has been granted, within the prescribed period and in accordance with section 9, a certificate for sequestration of the debtor’s estate, or

(iii) has granted a trust deed which, by reason of creditors objecting, or not agreeing, to it is not a protected trust deed.

(9) For the purposes of subsection (8)(e)(i), the debtor is not apparently insolvent by reason only of granting a trust deed or of giving notice to creditors as mentioned in section 16(1)(c).

(10) In subsection (8)(e)(ii), “the prescribed period” means such period, ending immediately before the date the debtor application is made, as may be prescribed under section 9(4)(b).

S-3 Debt advice and information package

3 Debt advice and information package

(1) No petition may be presented under section 2(1)(b)(i) unless the qualified creditor has, or qualified creditors have, provided the debtor, by such time prior to the presentation of the petition as may be prescribed, with a debt advice and information package.

(2) In this Act, “debt advice and information package” means the debt advice and information package referred to in section 10(5) of the 2002 Act.

S-4 Money advice

4 Money advice

(1) An application for the sequestration of a living debtor’s estate may not be made unless the debtor has obtained from a money adviser advice on—

(a) the debtor’s financial circumstances,

(b) the effect of the proposed sequestration,

(c) the preparation of the application, and

(d) such other matters as may be prescribed.

(2) In this Act, “money adviser” means a person who—

(a) is not an associate of the debtor, and

(b) is of a prescribed description or falls within a prescribed class.

S-5 Sequestration of estate of deceased debtor

5 Sequestration of estate of deceased debtor

The sequestration of the estate of a deceased debtor is—

(a) by debtor application made by the executor, or a person entitled to be appointed as executor, on the estate,

(b) on the petition of a qualified creditor, or qualified creditors, of the deceased debtor,

(c) on the petition of a temporary administrator,

(d) on the petition of a member State liquidator appointed in main proceedings, or

(e) on the petition of a trustee acting under a trust deed.

S-6 Sequestration of other estates

6 Sequestration of other estates

(1) The estate belonging to any of the following (or held for or jointly by, as the case may be, the trustees, partners or members of any of the following) may be sequestrated—

(a) a trust in respect of debts incurred by it,

(b) a partnership (including a dissolved partnership),

(c) a body corporate,

(d) an unincorporated body,

(e) a limited partnership (including a dissolved limited partnership) within the meaning of the Limited Partnerships Act 1907.

(2) But it is not competent to sequestrate the estate of any of the following—

(a) a company registered under the Companies Act 2006,

(b) a limited liability partnership, or

(c) any other entity if it is an entity in respect of which an enactment provides, expressly or by implication, that sequestration is incompetent.

(3) The sequestration of a trust estate in respect of debts incurred by the trust is—

(a) by debtor application made by a majority of trustees, with the concurrence of a qualified creditor or qualified creditors, or

(b) on the petition of—

(i) a temporary administrator,

(ii) a member State liquidator appointed in main proceedings, or

(iii) a qualified creditor or qualified creditors, if the trustees as such are apparently insolvent.

(4) The sequestration of the estate of a partnership is—

(a) by debtor application made by the partnership where the partnership is apparently insolvent,

(b) by debtor application made by the partnership with the concurrence of a qualified creditor or qualified creditors, or

(c) on the petition of—

(i) a temporary administrator,

(ii) a member State liquidator appointed in main proceedings,

(iii) a trustee acting under a trust deed, or

(iv) a qualified creditor or qualified creditors, if the partnership is apparently insolvent.

(5) For the purposes of an application under...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT