2008 No. 115 (C. 10)

INSOLVENCY
BANKRUPTCY
DEBT
DILIGENCE

The Bankruptcy and Diligence etc. (Scotland) Act 2007 (Commencement No. 3, Savings and Transitionals) Order 2008

Made

The Scottish Ministers make the following Order in exercise of the powers conferred by sections 224(2) and 227(3) and (4) of the Bankruptcy and Diligence etc. (Scotland) Act 20071.

Citation1

This Order may be cited as the Bankruptcy and Diligence etc. (Scotland) Act 2007 (Commencement No. 3, Savings and Transitionals) Order 2008.

Interpretation2

In this Order–

  • “the Act” means the Bankruptcy and Diligence etc. (Scotland) Act 2007;

  • “the 1985 Act” means the Bankruptcy (Scotland) Act 19852;

  • “the 1987 Act” means the Debtors (Scotland) Act 19873; and

  • “the 2002 Act” means the Debt Arrangement and Attachment (Scotland) Act 20024.

Appointed day in respect of provisions of the Act3

1

The following provisions of the Act, in so far as not already in force, come into force on 1st April 2008:–

a

Part 1 (bankruptcy), except for–

i

section 18(5) (record of income payment orders and agreements in the register of insolvencies);

ii

section 21 (changes to composition);

iii

in section 25 (debt limits in sequestrations)–

aa

paragraph (a); and

ab

paragraph (b) in so far as it applies to debtor applications; and

iv

section 36 (minor and consequential amendments of the 1985 Act) in so far as it relates to the provisions of schedule 1 excepted from commencement by sub-paragraph (i)(i) and (ii) below;

b

in Part 6 (diligence on the dependence)–

i

section 169 except for the insertion of section 15H(4) of the 1987 Act; and

ii

sections 170 and 171;

c

Part 7 (interim attachment);

d

Part 9 (diligence against earnings);

e

in Part 10, section 206 (arrestment and action of furthcoming to proceed only on decree or document of debt) for the purpose of the insertion of section 73A(2) of the 1987 Act;

f

in Part 11, section 208 (abolition of sequestration for rent and restriction of landlord’s hypothec);

g

Part 12 (summary warrants, time to pay and charges to pay);

h

in section 226–

i

subsections (1) and (2) in so far as relating to the provisions of schedules 5 and 6 commenced by this Order; and

ii

subsection (3); and

i

schedule 1 (minor and consequential amendments of the 1985 Act), except for–

i

paragraph 41(a); and

ii

paragraph 44(1) and (2)(a) in so far as they apply to company insolvencies5.

2

The minor and consequential amendments and repeals in schedules 5 and 6 respectively specified in column 1 of Schedules 1 and 2 to this Order come into force on 1st April 2008, subject to paragraph (3).

3

Where in Schedule 1 or 2 to this Order a purpose is specified in column 2 of the Schedule in relation to an amendment or repeal, it comes into force only for that purpose, but where no purpose is specified it comes into force for all purposes.

4

The provisions of the Act specified in column 1 of Schedule 3 to this Order come into force on 1st April 2008 only for the purpose of making regulations or orders under the provisions so specified (or under the inserted provisions specified in column 2 of that Schedule).

Transitional modification of the Act – references to “judicial officer”4

1

Any reference to a “judicial officer” in, or having effect by virtue of, any provision of the Act commenced by this Order is to be read as a reference to a messenger-at-arms or a sheriff officer (or a reference to a messenger-at-arms and a sheriff officer as the case may be).

2

This article ceases to have effect on the day to be appointed for the coming into force of section 60 of the Act (abolition of offices of messenger-at-arms and sheriff officer).

Sequestrations – petitions presented before 1st April 20085

1

Nothing in any provision brought into force by this Order has effect as regards any sequestration in respect of which the petition is presented before 1st April 2008.

2

The 1985 Act, as in force immediately before 1st April 2008 continues to apply and have effect in relation to any sequestration in respect of which the petition is presented before that date.

Trust deeds – trust deeds granted before 1st April 20086

1

Nothing in any provision brought into force by this Order has effect as regards any trust deed granted before 1st April 2008.

2

Sections 1A(1)(a) and 59 of, and Schedule 5 to, the 1985 Act, as in force immediately before 1st April 2008, continue to apply and have effect in relation to any trust deed granted before that date.

Transitional arrangements – bankruptcy restrictions orders, debt advice and information packages in bankruptcy and definition of apparent insolvency

7

Where a sheriff is considering whether to make a bankruptcy restrictions order or interim bankruptcy restrictions order, or the Accountant in Bankruptcy is determining whether to accept a bankruptcy restrictions undertaking pursuant to section 56A, 56F or 56G, respectively, of the 1985 Act6, neither the sheriff nor the Accountant in Bankruptcy is to take into account any conduct of the debtor before 1st April 2008.

8

Section 5(2D) of the 1985 Act7 (creditor to provide debt advice and information package) has no effect in relation to a petition by a creditor presented before 22nd April 2008.

9

Notwithstanding the repeal of section 7(1)(c)(iii) of the 1985 Act by Part 1 of schedule 6 to the Act the apparent insolvency of a debtor may still be constituted by 14 days elapsing without payment following an attachment (or an attempt to attach) or the seizure of moveable property in pursuance of a summary warrant for the recovery of rates or taxes, where the attachment (or attempt to attach) or seizure occurred before 1st April 2008.

Diligence on the dependence, summary warrants, time to pay – proceedings before 1st April 200810

1

Nothing in any provision brought into force by this Order, except sections 15K and 15L of the 1987 Act (inserted by section 169 of the Act) and section 95A of the 1987 Act (inserted by section 170 of the Act), has effect as regards any diligence on the dependence of an action for which a warrant is applied for before 1st April 2008.

2

Nothing in any provision brought into force by this Order has effect as regards–

a

any diligence which is–

i

authorised by a summary warrant granted before 1st April 2008; and

ii

executed before 1st July 2008; and

b

any application for a time to pay direction or a time to pay order made before 1st April 2008.

Diligence against earnings – intimation of arrestment schedule and provision of information – schedule or order before 1st April 2008

11

Nothing in section 202 of the Act (intimation of arrestment schedule) has effect as regards any earnings arrestment, current maintenance arrestment or conjoined arrestment order where the earnings arrestment schedule, current maintenance arrestment schedule or conjoined arrestment order is served on the employer of the debtor before 1st April 2008.

12

1

Section 70A(1) of the 1987 Act8 shall not require the information described in section 70A(3) to be sent in respect of an earnings arrestment, current maintenance arrestment or conjoined arrestment order received before 1st April 2008.

2

In applying section 70A(2) to (4) of the 1987 Act in respect of an earnings arrestment, current maintenance arrestment or conjoined arrrestment order received before 1st April 2008, those subsections are to be read as if–

a

there is no requirement under section 70A(2) and (4)(a) to send the information mentioned in section 70A(3) as soon as reasonably practicable after 6th April 2008, but instead that information shall be sent no later than 6th October 2008;

b

for subsection (3)(b)(ii) there were substituted–

ii

where subsection (2) above applies, 6 October 2008

c

for subsection (4)(a) there were substituted–

a

6 April 2009

Diligence against earnings – transitional restriction on liability of employer13

1

Where a pay-day occurs within a period of 7 days after 1st April 2008 an employer operating an earnings arrestment, current maintenance arrestment or conjoined arrrestment order is entitled, but not required, on that day to give effect to sections 199, 200 and 205 of the Act.

2

Where, in accordance with paragraph (1), the employer on a pay-day (“the previous pay-day”) does not give effect to those sections, the employer must not include in any sum deducted from the net earnings of the debtor on a subsequent pay-day under the arrestment or order any sum in respect of the debtor’s net earnings on the previous pay-day.

3

Section 69(4) and (5) of the 1987 Act applies to a claim in respect of any deduction under paragraphs (1) and (2) as they apply to any deduction mentioned in those subsections.

Transitional arrangements – debt advice and information package in diligence against earnings, charge to pay

14

Notwithstanding any requirement on a creditor to provide a debt advice and information package by or under section 47(3) and (4), 51(2A) or 60(3A) of the 1987 Act9, an earnings arrestment, current maintenance arrestment or conjoined arrestment order may come into effect before 22nd April 2008 where no debt advice and information package has been provided to the debtor.

15

Notwithstanding any requirement to serve a charge for payment by or under any provision of the Act commenced by this Order, such a requirement shall not prevent execution of the diligence to which that requirement relates before 15th April 2008 (or where the person on whom the charge is to be served is outside the United Kingdom, before 29th April 2008).

FERGUS EWINGAuthorised to sign by the Scottish MinistersSt Andrew’s House,Edinburgh

SCHEDULE 1Provisions of schedule 5 (minor and consequential amendments) coming into force on 1st April 2008

Article 3(2) and (3)

Column 1 – provisions

Column 2 – purpose

1

Paragraph 10 (the Sheriff Courts (Scotland) Act 1971)10

For the purpose of substituting “an interim attachment, an attachment”

2

Paragraph 12 (the Civil Jurisdiction and Judgments Act 1982)11

3

In paragraph 13 (the Bankruptcy (Scotland) Act 1985)12–

a

sub-paragraph (1)

For the purposes of the provisions commenced in this Order

b

sub-paragraph (2)

c

sub-paragraph (3)(a)

d

sub-paragraph (3)(c)(i), (d)(i), and (d)(iv)

For the purpose of inserting “, interim attachment”

e

sub-paragraph (3)(c)(ii)

f

sub-paragraph (3)(d)(ii)

4

In paragraph 16 (the Debtors (Scotland) Act 1987)13–

a

sub-paragraph (1)

For the purposes of the provisions commenced in this Order

b

sub-paragraph (2)(c)

For the purposes of the insertion of section 2(2B) of the 1987 Act

c

sub-paragraph (2)(d) and (e)

d

sub-paragraph (3)

e

sub-paragraph (4)(a)

For the purposes of the substitution of section 5(5)(a) of the 1987 Act

f

sub-paragraph (7)(a)(i)

g

sub-paragraph (8)(b)

For the purposes of the insertion of section 9(2)(cb) of the 1987 Act

h

sub-paragraph (8)(d)

i

sub-paragraph (8)(e)(ii)

j

sub-paragraph (8)(g)

k

sub-paragraph (8)(i)

l

sub-paragraph (9)

m

sub-paragraph (10)

n

sub-paragraph (12)

o

sub-paragraph (13)

p

sub-paragraph (14)(a) and (b)

5

In paragraph 26 (the Water Industry (Scotland) Act 2002)14–

a

sub-paragraph (1)

For the purposes of the provision commenced in this Order

b

sub-paragraph (3)

For the purposes of the insertion of the reference to section 39(1) of the Debt Arrangement and Attachment (Scotland) Act 2002

6

In paragraph 30 (the Debt Arrangement and Attachment (Scotland) Act 2002)15–

a

sub-paragraph (1)

For the purposes of the provisions commenced in this Order

b

sub-paragraph (2)

c

sub-paragraph (12)

d

sub-paragraph (14)

SCHEDULE 2Repeals in schedule 6 coming into force on 1st April 2008

Article 3(2) and (3)

Column 1 – repeal

Column 2 – purpose

1

In the entry in Part 1 in respect of the Debtors (Scotland) Act 183816–

a

section 17

b

section 22

for the purpose of diligence on the dependence

2

The entry in Part 1 in respect of the Hypothec Amendment (Scotland) Act 186717.

3

The entry in Part 1 in respect of the Hypothec Abolition (Scotland) Act 188018.

4

The entry in Part 1 in respect of the Judicial Factors (Scotland) Act 188919.

5

The entry in Part 1 in respect of the Sheriff Courts (Scotland) Act 197120.

6

The entry in Part 1 in respect of the Sale of Goods Act 197921.

7

The entry in Part 1 in respect of the Family Law (Scotland) Act 198522.

for the purpose of diligence on the dependence

8

The entries in Part 1 in respect of the 1985 Act, other than–

a

the repeal of section 7(1)(c)(iv);

b

the repeals in section 14 (but not the repeal in subsection (4) of “permanent”);

c

the repeal in section 15(5)(a);

d

the repeal in section 17(8)(a);

e

the repeal in section 31(2) of “(reserving the effect of such inhibition on ranking)”;

f

in respect of section 37–

i

the repeal of subsection (1)(a); and

ii

in subsection (2) the repeals of “which” and “shall be effectual to create a preference for the inhibitor and”

iii

the repeal in subsection (8);

g

the repeal in section 54(7)(a) of “and adjudications”;

h

the repeal in Schedule 5, paragraph 2(1) of “and adjudications”.

9

The entry in Part 1 in respect of the Insolvency Act 198623.

10

In the entry in Part 1 in respect of the 1987 Act, the repeals of–

a

section 8(3);

b

in section 9(8), “to grant”;

c

paragraph 3 of Schedule 6.

for the purpose of diligence on the dependence

11

In the entry in Part 1 in respect of the Proceeds of Crime Act 200224, the repeal of section 285(7)

for the purpose of the abolition of sequestration for rent

12

In the entry in Part 1 in respect of the 2002 Act, the repeals of–

a

section 4(2A)(d)

b

section 60(1), (2)(b), (4) and (5)

13

Part 2 (revocation).

SCHEDULE 3Provisions of the Act coming into force on 1st April 2008 only for the purpose of making regulations or orders

Article 3(4)

Column 1 – provisions of the Act

Column 2 – enabling power inserted by the Act

Section 21(3), (4) and (7)

Schedule 4 to the 1985 Act, paragraphs 4(c), 5 and 11(3), 8A(1) and (2)

Section 25(a)

the 1985 Act, section 5(2B)(a)

Section 37(7) and (8)

Section 50(4) and (5)

Section 58(5)(c)

Section 61(1), (2) and (3)

Section 63(1) and (2)

Section 75(7)

Section 81(7)

Section 83(1)(a)

Section 83(3)(b)

Section 88(3)(a)

Section 91(2)

Section 92(2), (3)(b), (4)(a), (4)(c)(vi), (5)(f) and (7)

Section 96(5)

Section 97(7)

Section 98(6)

Section 106(2) and (4)

Section 108(2) and (8)

Section 111(2)(b)

Section 113(2)(a)

Section 114(4)

Section 117(2), (7)(b) and (8)(a)

Section 120(5)

Section 123(2)(a) and (5)

Section 124(3)

Section 128(3)

Section 129

Section 130(2)(a)

Section 133(2)(a)

Section 135(2)(a) and (d)(ii)

Section 140(2)(a) and (5)

Section 143(5)

Section 145(2)

Section 146(9)

Section 148(3)

Section 149

Section 155(4) of the Titles to Land Consolidation (Scotland) Act 1868 (c. 101)

Section 162

Section 159A(3) of that Act

Section 164(1) and (2)

Sections 159 and 159B of that Act

Section 175(3)

Section 176(1)(c)

Section 179(2)(a)(i)

Section 182(2)(a)

Section 183(3)(a) and (7)(a)

Section 185(4)

Section 188(4)(a)

Section 189(3)(a)

Section 196(2)

Section 198(2)

Section 206

Sections 73A(5), 73B(2), 73C(2), 73E(3), 73F(6), 73G(2), 73H(1) and (2), 73M(2)(a), 73Q(3)(a), 73S(1) and (2) of the 1987 Act

Section 214(4)

Section 215

Section 216(6)

Section 217(1)(c)

Section 220

Schedule 2, paragraph 22

Schedule 3, paragraph 4

Schedule 5, paragraph 13(3)(f) and (g)

Section 37(8F) and (10) of the 1985 Act

Schedule 5, paragraph 30(4)

Section 13A(2)(a) of the 2002 Act

(This note is not part of the Order)

Article 3 of this Order brings into force on 1st April 2008 provisions of the Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3) (“the Act”), subject to transitional and saving provisions.

References to “judicial officer” in provisions commenced by the Order are to be read as references to messengers-at-arms or sheriff officers prior to the coming into force of section 60 of the Act (abolition of those offices) (article 4).

Bankruptcy

The bankruptcy provisions brought into force are all of the provisions in Part 1 of the Act with the exception of sections 18(5) (record of income payment order and agreements in the register of insolvencies), section 21 (changes to composition), section 25(a), and section 25(b) for the purposes of debtor applications (debt limits in sequestrations). Related amendments and repeals in schedules 1, 5 and 6 are also brought into force (article 3(1)(i), (2) and (3) and Schedules 1 and 2 to this Order).

The Order also sets out transitional arrangements for the changes to bankruptcy. There are savings for petitions for sequestrations presented, and trust deeds entered into, before 1st April 2008 (articles 5 and 6). There are transitional arrangements for bankruptcy restrictions orders, for the service of debt advice and information packages in bankruptcy and for the definition of apparent insolvency (articles 7 to 9).

Diligence

The diligence provisions brought into force are Part 6 (diligence on the dependence), Part 7 (interim attachment), Part 9 (diligence against earnings), section 73A(2) of the Debtors (Scotland) Act 1987 inserted by section 206 in Part 10 (arrestment in execution), section 208 in Part 11 (abolition of sequestration for rent) and Part 12 (summary warrants, time to pay and charges to pay). Related amendments and repeals in schedules 5 and 6 are also brought into force.

The Order also sets out transitional arrangements for the changes to diligence. There are savings for diligence on the dependence, diligence in pursuance of summary warrants granted and applications for time to pay (article 10). There are transitional arrangements for earnings arrestment (articles 11 to 14) and for service of charges to pay (article 15).

Powers enabling regulations and orders to be made under the remaining provisions of the Act (or inserted by those provisions) are also commenced for the restricted purpose of making regulations and orders.

The Act received Royal Assent on 15th January 2007. Sections 224, 225 and 227 of the Act came into force on Royal Assent and section 222 came into force on the day after Royal Assent.

(This note is not part of the Order)

Provision

Date of Commencement

S.S.I.No.

s.211

8th March 2007

2007/82

s.212(1), (2) to (6) (partially)

s.221

s.223

s.36 (partially)

31st March 2007

2007/82

s.212(1), (8) to (16) (partially)

s.226(1) (partially)

sch. 1, para. 42(a)

sch. 5, para. 30(1), (5) to (8)(a), (10), (11)(a)(ii) and (b) and (15) (partially)

s.20s.35

19th February 2008

2008/45