Bankruptcy
77.This Part of this Act makes a series of amendments to the Bankruptcy (Scotland) Act 2016 (“
Section 19: Bankruptcy: service of documents
78.This section inserts a new section 224A into the 2016 Act, which applies whenever the 2016 Act, or regulations made under it, authorises or requires a document to be served on a person, whatever particular wording is used to describe this. The new section 224A(1) allows service of a document by personal delivery, by post or by electronic transmission.
79.Section 224A(2) and (3) set out the practicalities of serving a document under the 2016 Act by post, including when receipt is deemed to have taken place.
80.Section 224A(4) provides further detail in relation to documents served by electronic means. Electronic transmission of a document must be effected in a manner that the recipient has indicated to the sender that they are willing to receive the document electronically. Subsection (4)(b) makes provision as to the circumstances in which willingness to receive a document electronically may be given or inferred. Subsection (4)(c) provides that uploading a document to an electronic storage system from where it may be downloaded by the recipient may constitute electronic transmission, where the recipient is sent a notification that the document has been uploaded in that way. Finally, subsection (4)(d) provides that a document transmitted electronically is to be taken to have been received on the day on which transmission took place: however this is only a presumption which can be displaced if there is evidence to the contrary.
81.The effect of subsection (5) is that different provision may be made regarding the service of documents by rules of court, or by an order of court depending on the circumstances of an individual case, and the rest of section 224A will not apply.
82.Subsection (3) of section 15 repeals section 187 of the 2016 Act, which previously only applied to Part 14 of the 2016 Act on administration, accounting and discharge, as the new section 224A is to apply across the whole of the 2016 Act’s provisions.
83.Subsection (4) of section 15 makes transitional provision to ensure that the new law represented in section 224A only applies to documents served on or after the commencement date of 1 October 2022 (see section 59 for commencement arrangements).
Section 20: Bankruptcy: meaning of “qualified creditor” and “qualified creditors”
84.This section amends the definitions of “qualified creditor” and “qualified creditors” in section 7(1) of the 2016 Act by raising the amount of money a creditor or a group of creditors must be owed in order to be “qualified” from £3,000 to £5,000. A qualified creditor has the right to petition the court for a debtor’s bankruptcy in terms of section 2(1)(b)(i) of the 2016 Act, where the debtor is apparently insolvent. The new definition will apply in relation to any sequestration in respect of which the petition was presented on or after the commencement date of 1 October 2022 (see section 59 for commencement arrangements).
Section 21: Bankruptcy: remote meetings of creditors
85.This section amends schedule 6 of the 2016 Act to allow meetings of creditors to take place using electronic means, as well as in person.
Diligence
Section 22: Bank arrestments: protected minimum balance
86.This section of this Act relates to the sum that is protected in an individual’s bank account when a bank arrestment is executed under the law on diligence for a debt owed. This is known as the protected minimum balance and previously, under the Debtors (Scotland) Act 1987, had been linked to the monthly threshold for earnings arrestment, which is a different type of diligence.
87.Section 73F of the Debtors (Scotland) Act 1987 is amended to de-couple the arrangements for fixing the protected minimum balance from the provisions that set the minimum monthly salary limits for earning arrestments. The protected minimum balance for bank arrestments is raised to £1,000, and a power is provided for the Scottish Ministers to amend the protected minimum balance in the future through negative procedure regulations. However, the new law has no effect in relation to an arrestment executed before the commencement date of 1 November 2022 (see section 59 for commencement arrangements).
Section 23: Period of moratorium on diligence
88.This section increases the length of the moratorium against diligence created by sections 195 to 198 of the Bankruptcy (Scotland) Act 2016, from a period of 6 weeks to 6 months. Subsection (3) makes a consequential change to the arrangements for those in a moratorium who then enter a protected trust deed, allowing the moratorium to remain in place beyond 6 months for a further 7 weeks, in order to allow sufficient time for the registration of protected status
Section 24: Power to amend period of moratorium on diligence
89.This section adds to the amendment of section 198 of the Bankruptcy (Scotland) Act 2016 effected by section 23 by providing the Scottish Ministers with a power to amend the period of the moratorium against diligence through affirmative procedure regulations.
