Bankruptcy (Scotland) Act 2016

PART 1Application or petition for sequestration

Applications and petitions

2Sequestration of estate of living debtor

3Debt advice and information package

5Sequestration of estate of deceased debtor

6Sequestration of other estates

7Qualified creditor and qualified creditors

8Debtor applications: general

9Certificate for sequestration

10Death or withdrawal

11Debtor application: provision of information

12Petition for sequestration of estate: provision of information

13Further provisions relating to presentation of petitions

14Further provisions relating to debtor applications

14AMain proceedings in Scotland: undertaking by trustee in respect of assets in another EU member State

14BMain proceedings in another member State: approval of undertaking offered by member State insolvency practitioner to local creditors in the UK

Meaning of “apparent insolvency”

16Meaning of “apparent insolvency”

Concurrent proceedings

17Concurrent proceedings for sequestration or analogous remedy

18Powers in relation to concurrent proceedings

Creditor's oath

19Creditor's oath

PART 2Sequestration: award and recall

Incomplete or inappropriate debtor applications

20Debtor application: incomplete application

21Refusal of debtor application: inappropriate application

Award of sequestration

22When sequestration is awarded

23Circumstances in which sequestration is not to be awarded in pursuance of section 22(5)

23A Effect of sequestration on land attachment

24Effect of sequestration on diligence generally

25Effect of sequestration on diligence: estate of deceased debtor

26Registration of warrant or determination of debtor application

27Further matters in relation to award of sequestration

28Benefit from another estate

Recall of sequestration

29Petitions for recall of sequestration

30Recall of sequestration by sheriff

31Application to Accountant in Bankruptcy for recall of sequestration

32Application under section 31: further procedure

33Determination where amount of outlays and remuneration not agreed

34Recall of sequestration by Accountant in Bankruptcy

35Recall where Accountant in Bankruptcy trustee

36Application for recall: remit to sheriff

37Recall of sequestration by Accountant in Bankruptcy: review and appeal

38Effect of recall of sequestration

PART 3Initial stages of sequestration, statutory meeting and trustee vote

39Interim preservation of estate

40Offences in relation to interim preservation of estate

41Statement of assets and liabilities etc.

42Duties on receipt of list of assets and liabilities

Statutory meeting

43Statutory meeting

44Calling of statutory meeting

45Procedure where no statutory meeting called

46Submission of claims for voting purposes

47Offences in relation to submission of claims for voting purposes

48Proceedings before trustee vote

PART 4Trustees and commissioners

50Functions of trustee

51Appointment of trustee

52Application to Accountant in Bankruptcy by trustee for a direction

Interim trustees

53Functions of interim trustee

54Appointment of interim trustee

55Removal, resignation etc. of interim trustee

56Termination of interim trustee's functions where not appointed trustee

57Appeal or review by virtue of section 56

58Termination of Accountant in Bankruptcy's functions as interim trustee where not appointed trustee

59Review or appeal by virtue of section 58

Replacement trustees

60Appointment of replacement trustee

61Procedure in application to Accountant in Bankruptcy under section 60

62Procedure in application under section 60, or appeal under section 61, to sheriff

63Termination of original trustee's functions

64Accountant in Bankruptcy's intromissions in capacity of original trustee

65Discharge of original trustee

66Replacement of trustee acting in more than one sequestration

67Further provision as regards replacement under section 66

68Review of determination or appointment under section 66

Resignation or death of trustee

69Resignation or death of trustee

Removal of trustee and appointment of new trustee

70Removal of trustee other than where trustee is unable to act or should no longer continue to act: general

71Removal of trustee other than where trustee is unable to act or should no longer continue to act: review, appeal and election of new trustee

72Removal of trustee where trustee is unable to act or should no longer continue to act: general

73Removal of trustee where trustee is unable to act or should no longer continue to act: review, appeal and election of new trustee

74Election or appointment of new trustee by virtue of section 71(6) or 73(1)

75Further provision as regards election or appointment of new trustee

76Commissioners

77Election, resignation and removal of commissioners

PART 5Vesting etc.

78Vesting of estate at date of sequestration

79Provision supplementary to section 78 and interpretation of Part 5

80Property subject to restraint order

81Property released from detention

82Property in respect of which receivership or administration order is made

83Property in respect of which realisation order is made

84Property subject to certain orders where confiscation order discharged or quashed

85Vesting of income received by debtor after sequestration

86Further provision as regards vesting of estate

87Dealings and circumstances of debtor after sequestration

Limitation on vesting

88Limitation on vesting

PART 6Debtor's contribution

Common financial tool

89Assessment of debtor's contribution

Payments by debtor following sequestration

90Debtor contribution order: general

91Debtor contribution order: payment period and intervals

92Debtor contribution order: review and appeal

93Effect of debtor contribution order

94Deductions from debtor's earnings and other income

95Variation and removal of debtor contribution order by trustee

96Payment break

97Sections 95 and 96: review and appeal

PART 7Safeguarding interests of creditors

Gratuitous alienations and unfair preferences

98Gratuitous alienations

99Unfair preferences

Recall of certain orders

100Recall of order for payment of capital sum on divorce or on dissolution of civil partnership

Excessive contributions

101Recovery of excessive pension contributions

102Orders under section 101

103Orders under section 101: supplementary

104Excessive contributions in pension-sharing cases: general

105Excessive contributions in pension-sharing cases: recovery orders

106Recovery orders: supplementary

107References in Part 7 to “the 1889 Act” and to “the 1999 Act”

PART 8Administration of estate by trustee

108Taking possession of estate by trustee

109Management and realisation of estate

Contractual powers and money received

110Contractual powers of trustee

111Money received by trustee

112Debtor's family home

113Power of trustee in relation to debtor's family home

Rights of spouse or civil partner

114Protection of rights of spouse against arrangements intended to defeat them

115Protection of rights of civil partner against arrangements intended to defeat them

Account of state of affairs

116Debtor's account of state of affairs

Financial education for debtor

117Financial education for debtor

PART 9Examination of debtor

Private and public examination

118Private examination

119Public examination

120Provisions ancillary to sections 118 and 119

Conduct of examination

121Conduct of examination

PART 10Claims, dividends and distribution etc.

Submission and adjudication of claims

122Submission of claims to trustee

123Evidence as to validity or amount of claim

124False claims etc.

125Further provision as to claims

126Adjudication of claims: general

127Adjudication of claims: review and appeal

Entitlement to vote and draw a dividend

128Voting and drawing a dividend

129Priority in distribution

129ASection 129: interpretation

130Accounting periods

131Distribution in accordance with accounting periods

Procedure after end of accounting period

132Submission of accounts and scheme of division

133Audit of accounts and determination as to outlays and remuneration payable to trustee

134Appeal against determination as to outlays and remuneration payable to trustee

135Further provision as to procedure after end of accounting period

136Procedure after end of accounting period where Accountant in Bankruptcy is trustee

PART 11Discharge

Discharge of debtor

137Discharge of debtor where Accountant in Bankruptcy not trustee

138Discharge of debtor where Accountant in Bankruptcy trustee

139Discharge of debtor: review and appeal

140Discharge of debtor to whom section 2(2) applies

141Deferral of discharge where debtor cannot be traced

142Debtor not traced: new trustee

143Debtor not traced: subsequent debtor contact

144Subsequent debtor contact: review and appeal

145Effect of discharge under section 137, 138 or 140

146Discharge under section 140: conditions

147Section 146: sanctions

Discharge of trustee

148Discharge of trustee

149Further provision as regards discharge of trustee

150Unclaimed dividends

151Discharge of Accountant in Bankruptcy

PART 12Assets discovered after discharge of trustee

152Assets discovered after discharge of trustee: appointment of trustee

153Assets discovered after discharge of trustee: notice

154Assets discovered after discharge of trustee: appeal

PART 13Bankruptcy restrictions orders and interim bankruptcy restrictions orders

Bankruptcy restrictions orders

155Bankruptcy restrictions order

156Grounds for making bankruptcy restrictions order

157Bankruptcy restrictions order: application of section 218(13)

158Timing for making a bankruptcy restrictions order

159Duration of bankruptcy restrictions order and application for revocation or variation

Interim bankruptcy restrictions orders

160Interim bankruptcy restrictions orders

Effect of recall of sequestration

161Bankruptcy restrictions orders and interim bankruptcy restrictions orders: effect of recall of sequestration

PART 14Voluntary trust deeds for creditors

162Voluntary trust deeds for creditors

Protected trust deeds: protected status

163Protected status: general

Conditions for protected status

164Protected status: the debtor

165Protected status: the trustee

166Exclusion of a secured creditor from trust deed

167Statements in and advice regarding trust deed

168Payment of debtor's contribution

169Notice in register of insolvencies

170Documents to be sent to creditors

Registration for protected status

171Registration for protected status

Effect of protected status etc.

172Effect of protected status: general

173Effect of protected status on diligence against earnings

173AEffect of protected status on essential supplies

174Deductions by virtue of protected trust deed from debtor's earnings

175Agreement in respect of debtor's heritable property

176Dividend payments

177Sequestration petition by qualified creditor

178Creditor's application as respects intromissions of trustee

Administration, accounting and discharge

179Directions to trustee under protected trust deed

180Information and notification obligations of trustee under protected trust deed

181Administration of trust under protected trust deed

182Retention of documents by trustee under protected trust deed

183Remuneration payable to trustee under protected trust deed

184Protected trust deed: discharge of debtor

185Student loans

186Protected trust deed: discharge of trustee

187Electronic delivery of notices etc. under this Part

Appeals and directions

188Protected trust deed: appeal

189Protected trust deed: sheriff's direction

Application for conversion to sequestration

190Application for conversion to sequestration

191Contents of affidavit required under section 190(2)

192Powers of Accountant in Bankruptcy on application for conversion to sequestration

Part 14: general

193Interpretation of Part 14

194Regulations modifying Part 14

PART 15Moratorium on diligence

195Moratorium on diligence: notice of intention to make debtor application under section 2(1)(a)

196Moratorium on diligence: notice of intention to make debtor application under section 6

197Moratorium on diligence following notice under section 195(1) or 196(1)

198Period of moratorium

PART 16Accountant in Bankruptcy

199Accountant in Bankruptcy

200Supervisory functions of Accountant in Bankruptcy

201Performance of certain functions of Accountant in Bankruptcy

202Further duty of Accountant in Bankruptcy

Directions to Accountant in Bankruptcy

203Directions to Accountant in Bankruptcy

Conduct of proceedings in the sheriff court

204Conduct of proceedings in the sheriff court

Fees for Accountant in Bankruptcy

205Fees for Accountant in Bankruptcy

PART 17Miscellaneous

206Liabilities and rights of co-obligants

207Member State insolvency practitioner deemed creditor

208Trustee's duty to provide certain notices and copies of documents to member State insolvency practitioner

209Extortionate credit transactions

210Sederunt book and other documents

211Power of court to cure defects in procedure

212Power of Accountant in Bankruptcy to cure defects in procedure

213Decision under section 212(1): review

214Review of decision by Accountant in Bankruptcy: grounds of appeal

215Debtor to co-operate with trustee

216Arbitration and compromise

217Meetings of creditors and commissioners

218General offences by debtor etc.

219General offences: supplementary and penalties

220Summary proceedings

221Outlays of insolvency practitioner in actings as interim trustee or trustee

222Supplies by utilities

223Disqualification provisions: power to make regulations

224Regulations: applications to Accountant in Bankruptcy etc.

224AService of documents

225Regulations: general

226Modification of regulation making powers

227Variation of references to time, money etc.

228Interpretation

229Meaning of “associate”

230“Associates”: regulations for the purposes of section 229

231Proceedings under EU insolvency proceedings regulation: modified definition of “estate”

232Crown application

233Re-enactment

234Modifications, repeals, savings, revocations and transitional provisions

235Continuity of the law

236Sequestrations to which this Act applies

237Commencement

SCHEDULE 1DEBTOR TO WHOM SECTION 2(2) APPLIES: APPLICATION OF ACT

Modification of certain provisions of Act

1(1) Where section 2(2) applies in relation to a debtor,...

Accountant in Bankruptcy's duty to consider whether paragraph 1 should cease to have effect

2(1) This paragraph applies where paragraph 1 applies in relation...

Procedure where Accountant in Bankruptcy considers paragraph 1 should cease to have effect

3(1) If AiB considers under paragraph 2(2) that paragraph 1...

Debtor's right of appeal against decision under paragraph 3

4(1) This paragraph applies where AiB gives notice to a...

Decision that paragraph 1 ceases to have effect: modification of certain provisions of Act

5(1) Where paragraph 1 ceases to have effect in relation...

SCHEDULE 2DETERMINATION OF AMOUNT OF CREDITOR'S CLAIM

Amount which may be claimed generally

1(1) Subject to the provisions of this schedule, the amount...

Claims for aliment and for periodical allowance on divorce or on dissolution of civil partnership

2(1) A person entitled to aliment, however arising, from a...

Debts depending on contingency

3(1) The amount which a creditor is entitled to claim...

4(1) A secured creditor, in calculating the amount of the...

Valuation of claims against partners for debts of the partnership

5(1) Where a creditor claims, in respect of a debt...

SCHEDULE 3PREFERRED DEBTS

PART 1List of preferred debts

Contributions to occupational pension schemes etc.

1Any sum which is owed by the debtor and is...

Remuneration of employees etc.

2(1) So much of any amount which—

3So much of any amount which— (a) is ordered, whether...

Levies on coal and steel production

4Any sums due at the relevant date from the debtor...

Debts owed to the Financial Services Compensation Scheme

5Any debt owed by the debtor to the scheme manager...

Deposits covered by Financial Services Compensation Scheme

6So much of any amount owed at the relevant date...

7So much of any amount owed at the relevant date...

8An amount owed at the relevant date by the debtor...

Certain HMRC debts

8A(1) Any amount owed at the relevant date by the...

PART 2Interpretation of Part 1

Meaning of “the relevant date”

9In Part 1, “the relevant date” means—

Amounts payable by way of remuneration

10(1) For the purposes of paragraph 2, a sum is...

Meaning of “prescribed”

11In paragraphs 2 and 3, “prescribed” means prescribed by regulations...

Meaning of “scheme manager”

12In paragraph 5, “the scheme manager” has the meaning given...

Meaning of “eligible deposit”

13(1) In paragraphs 6 to 8, “eligible deposit” means a...

Transitional provisions

14Regulations under paragraph 2 or 3 may contain such transitional...

SCHEDULE 4VOLUNTARY TRUST DEEDS FOR CREDITORS

Remuneration of trustee

1Whether or not— (a) provision is made in the trust...

Accountant in Bankruptcy's power to carry out audit

2AiB may, at any time, audit the trustee's accounts and...

Registration of notice of inhibition

3(1) The trustee, from time to time after the trust...

Lodging of claim to bar effect of limitation of actions

4The submission to the trustee, acting under a trust deed,...

Valuation of claims

5(1) Unless the trust deed otherwise provides, schedule 2 applies...

SCHEDULE 5INFORMATION TO BE INCLUDED IN THE SEDERUNT BOOK

1A copy of the debtor application made under section 2(1)(a)....

2A copy of the petition presented under section 2(1)(b).

3Where the trustee is AiB, a copy of the statement...

3A. . . . . . . . . ....

4A copy of the award of sequestration under section 22(1)...

5A copy of the warrant to cite the debtor granted...

6Where the trustee is not AiB— (a) the audited accounts...

7Where the trustee is AiB— (a) the accounts audited by...

8Where AiB is appointed interim trustee and the sheriff awards...

9A copy of— (a) an order— (i) recalling or refusing...

10A copy of an order under section 114(3)(b) or 115(3)(b)...

11Where the trustee is a replacement trustee appointed under section...

12Where the trustee is not AiB, a copy of a...

13A copy of a notice given under section 44(3).

14Where the trustee is not AiB, a copy of a...

15Where the trustee is a replacement trustee appointed under section...

16A copy of an initial proposal for the debtor's contribution...

17A copy of a debtor contribution order applying to the...

18A copy of a decree issued under section 98 affecting...

19A copy of a decree of recall issued following an...

20A copy of a decree under section 99 affecting the...

21The inventory and valuation of the estate, made up and...

22A copy of an account given by the debtor under...

23The debtor's deposition at an examination subscribed under section 121(6)....

24A copy of the record of an examination sent to...

25An appropriate entry in relation to the production of any...

26Where the trustee accepts or rejects a claim under section...

27A copy of a decision of AiB under subsection (4)(b)...

28An agreement or determination in respect of the accounting period...

29Where the trustee is not AiB, the audited accounts, the...

30A copy of the certificate of discharge given to the...

31A copy of the certificate deferring discharge where the debtor...

32Where AiB has acted as trustee, after making the final...

33Where AiB has acted as trustee and is discharged from...

34A decision of the court under section 211 and of...

35A copy of a decree arbitral or, as the case...

36The minutes of the meeting referred to in paragraphs 8...

37A copy of the minutes of a meeting sent to...

38Where a meeting of commissioners is called in accordance with...

39A copy of any decision (including any determination, direction, award,...

40A copy of any decree, interlocutory decree, direction or order...

SCHEDULE 6MEETINGS OF CREDITORS AND COMMISSIONERS

PART 1Meetings of creditors other than the statutory meeting

Calling of meeting

1The trustee in the sequestration must call a meeting of...

2Any such meeting must be held not later than 28...

3The trustee, or a commissioner who has given notice to...

4The trustee, calling a meeting under paragraph 1 or 3,...

5Where— (a) a requirement has been made under paragraph 1,...

6AiB, calling a meeting under paragraph 5, is no fewer...

7It is not necessary to notify under paragraph 4 or...

Role of trustee at meeting

8At the commencement of a meeting the trustee is to...

9If no person is elected in pursuance of paragraph 8,...

10The trustee is to arrange for a record to be...

11The trustee, a creditor or any other person having an...

PART 2All meetings of creditors

Validity of proceedings

12No proceedings at a meeting are invalidated by reason only...

Holding of meeting

13Every meeting must be held either— (a) in such place...

13AWhere a meeting is to be held in pursuance of...

14A creditor may authorise in writing a person to represent...

15A creditor must lodge with the trustee, before the commencement...

16Any reference in paragraph 8, or in the following provisions...

17The quorum at any meeting is one creditor.

Voting at meeting

18Any question at a meeting is to be determined by...

Objections by creditors

19At any meeting the person chairing it may allow or...

20A person aggrieved by the determination of the person chairing...

21If the person chairing the meeting is in doubt as...

Adjournment of meeting

22If no creditor has appeared at a meeting by half...

23The person chairing the meeting may, with the consent of...

24Any adjourned meeting must be held at the same time...

Minutes of meeting

25The minutes of every meeting must be signed by the...

PART 3Meetings of commissioners

26The trustee— (a) may call a meeting of commissioners at...

27If the trustee fails to call a meeting of commissioners...

28The trustee must give the commissioners at least 7 days'...

29The trustee is to act as clerk at a meeting...

30If the commissioners are considering the performance of the functions...

31The quorum at a meeting of commissioners is one commissioner...

32Any matter may be agreed by the commissioners without a...

SCHEDULE 7RE-ENACTMENT OF SECTIONS 10 AND 189 OF THE BANKRUPTCY (SCOTLAND) ACT 1913

Arrestments and attachments

1(1) Subject to sub-paragraph (2), all arrestments and attachments which...

Exemptions from stamp or other duties for conveyances, deeds etc. relating to sequestrated estates

2Any— (a) conveyance, assignation, instrument, discharge, writing or deed relating...

SCHEDULE 8MODIFICATION OF ENACTMENTS

Judicial Factors (Scotland) Act 1889

1In section 11A(2) of the Judicial Factors (Scotland) Act 1889...

Sheriff Courts (Scotland) Act 1907

2In section 34 of the Sheriff Courts (Scotland) Act 1907...

Conveyancing (Scotland) Act 1924

3In section 44(4)(c) (limitation of effect of entries in the...

Administration of Justice Act 1956

4In section 47G of the Administration of Justice Act 1956...

Conveyancing and Feudal Reform (Scotland) Act 1970

5In section 19(3) of the Conveyancing and Feudal Reform (Scotland)...

Prescription and Limitation (Scotland) Act 1973

6(1) The Prescription and Limitation (Scotland) Act 1973 is amended...

Local Government (Scotland) Act 1973

7In section 31 of the Local Government (Scotland) Act 1973...

Education (Scotland) Act 1980

8In section 73B(12) of the Education (Scotland) Act 1980 (regulations...

Family Law (Scotland) Act 1985

9(1) The Family Law (Scotland) Act 1985 is amended as...

Legal Aid (Scotland) Act 1986

10In Part 2 of schedule 2 of the Legal Aid...

Debtors (Scotland) Act 1987

11(1) The Debtors (Scotland) Act 1987 is amended as follows....

Agricultural Holdings (Scotland) Act 1991

12(1) The Agricultural Holdings (Scotland) Act 1991 is amended as...

Crofters (Scotland) Act 1993

13In paragraph 10 of schedule 2 of the Crofters (Scotland)...

Proceeds of Crime (Scotland) Act 1995

14In paragraph 2(1)(j) of schedule 1 of the Proceeds of...

Education (Scotland) Act 1996

15In paragraph 4 of schedule 1 of the Education (Scotland)...

Adults with Incapacity (Scotland) Act 2000

16In section 87(4) of the Adults with Incapacity (Scotland) Act...

International Criminal Court (Scotland) Act 2001

17(1) Schedule 6 of the International Criminal Court (Scotland) Act...

Debt Arrangement and Attachment (Scotland) Act 2002

18(1) The Debt Arrangement and Attachment (Scotland) Act 2002 is...

Agricultural Holdings (Scotland) Act 2003

19In section 93 of the Agricultural Holdings (Scotland) Act 2003...

Fire (Scotland) Act 2005

20In schedule 1A of the Fire (Scotland) Act 2005 (the...

Further and Higher Education (Scotland) Act 2005

21In schedule 2B of the Further and Higher Education (Scotland)...

Charities and Trustee Investment (Scotland) Act 2005

22In section 70(3)(b) of the Charities and Trustee Investment (Scotland)...

Licensing (Scotland) Act 2005

23In section 28(8) of the Licensing (Scotland) Act 2005 (period...

Bankruptcy and Diligence etc. (Scotland) Act 2007

24(1) The Bankruptcy and Diligence etc. (Scotland) Act 2007 is...

Criminal Proceedings etc. (Reform) (Scotland) Act 2007

25In section 73(2)(b) of the Criminal Proceedings etc. (Reform) (Scotland)...

Legal Services (Scotland) Act 2010

26(1) The Legal Services (Scotland) Act 2010 is amended as...

Housing (Scotland) Act 2010

27(1) The Housing (Scotland) Act 2010 is amended as follows....

Food (Scotland) Act 2015

28In section 58(1) of the Food (Scotland) Act 2015 (general...

SCHEDULE 9REPEALS AND REVOCATIONS

PART 2Revocations

Bankruptcy (Scotland) Act 2016

2016 asp 21

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.

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 2016C1 C2

Annotations:

Modifications etc. (not altering text)

C1

Act modified (30.11.2016) by The Bankruptcy (Scotland) Regulations 2016 (S.S.I. 2016/397), reg. 31(2)

C2

Act applied (with modifications) (8.12.2017) by The Risk Transformation Regulations 2017 (S.I. 2017/1212), regs. 1(2), 166(2), 167(2), Sch. 2, Sch. 3 (with regs. 168, 189)