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Bankruptcy and Diligence etc. (Scotland) Act 2007

New section 73F – Protection of minimum balance in certain bank accounts

688.New section 73F protects debtors by providing that a minimum level of funds within bank and other accounts cannot be attached by an arrestment.

689.Section 73F applies to both arrestments in execution and arrestments on the dependence providing the arrestment attaches funds of a debtor held by a bank or similar financial institution. It applies only if the debtor is an individual (not a company, partnership or other body or organisation) and the account in question is not a trading account and is not in the name of a company, partnership or other association (subsections (1) and (2)).

690.Subsections (3) and (4) have the effect of preventing the attachment of an amount below the amount which, in an earnings arrestment, cannot be arrested when a person is paid monthly. At the time of the passing of this Act, this amount was set at £370 by the Diligence Against Earnings (Variation) (Scotland) Regulations 2006 (S.S.I. 2006/116). This amount can, however, be varied by the Scottish Ministers under the power conferred upon them in section 49(7)(a) of the 1987 Act (the functions of the Lord Advocate were transferred to the Secretary of State (by virtue of the Transfer of Functions (Lord Advocate and Secretary of State) Order 1999 (S.I. 1999/678) and to the Scottish Ministers by virtue of section 53 of the Scotland Act 1998). So, where the sum held by the arrestee is more than that amount, only the funds over that amount can be attached by an arrestment. If the sum in the debtor’s account is less than that amount, no funds are attached.

691.Subsection (5) defines what is meant by “bank or other financial institution”.

692.Under subsection (6), the Scottish Ministers may modify the types of account or vary any descriptions of the types of account that section 73F applies to. Also the definition of “bank or other financial institution” may be modified by the Scottish Ministers to add or remove types of financial institution or vary any of the descriptions of the types of institution. These powers are exercisable by regulations subject to the negative resolution procedure.

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