Bankruptcy (Scotland) Act 1993

3 Petitions for sequestration

(1) Section 5 of the 1985 Act (procedure for the sequestration of the estate of a living debtor) shall be amended as follows.

(2) For subsection (2) (persons who may petition) there shall be substituted the following subsections—

“(2) The sequestration of the estate of a living debtor shall be on the petition of—

(a) the debtor, if either subsection (2A) or (2B) below applies to him;

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

(c) the trustee acting under a trust deed if, and only if, one or more of the conditions in subsection (2C) below is satisfied.

(2A) This subsection applies to the debtor if a qualified creditor or qualified creditors concur in the petition.

(2B) This subsection applies to the debtor where—

(a) the total amount of his debts (including interest) at the date of presentation of the petition is not less than £1,500;

(b) an award of sequestration has not been made against him in the period of 5 years ending on the day before the date of presentation of the petition; and

(c) the debtor either—

(i) is apparently insolvent; or

(ii) has granted a trust deed and the trustee has complied with the requirements of sub-sub-paragraphs (a) to (c) of paragraph 5(1) of Schedule 5 to this Act but has received notification as mentioned in sub-sub-paragraph (d) of that paragraph, and for the purposes of this paragraph a debtor shall not be apparently insolvent by reason only that he has granted a trust deed or that he has given notice to his creditors as mentioned in paragraph (b) of section 7(1) of this Act.

(2C) The conditions mentioned in subsection (2)(c) above are—

(a) that the debtor has failed to comply—

(i) with any obligation imposed on him under the trust deed with which he could reasonably have complied; or

(ii) with any instruction or requirement reasonably given to or made of him by the trustee for the purposes of the trust deed; or

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

(3) In subsection (4) delete “£750” where it appears and substitute “£1,500”.

(4) After subsection (4) there shall be inserted the following subsection—

“(4A) In this Act, “trust deed” means a voluntary trust deed granted by or on behalf of the debtor whereby his estate (other than such of his estate as would not, under section 33(1) of this Act, vest in the permanent trustee if his estate were sequestrated) is conveyed to the trustee for the benefit of his creditors generally.”

(5) In subsection (6) (copy of petition to be sent to the Accountant in Bankruptcy) for the words from “send” to “section” there shall be substituted the words “, on the day the petition for sequestration is presented under this section, send a copy of the petition”.

(6) After subsection (6) there shall be inserted the following subsection—

“(6A) Where the petitioner is the debtor—

(a) he shall lodge with the petition a statement of assets and liabilities; and

(b) he shall, on the day the petition is presented, send to the Accountant in Bankruptcy such statement of assets and liabilities as was lodged in court in pursuance of paragraph (a) above.”

(7) After subsection (8) there shall be inserted the following subsections—

“(9) If the debtor—

(a) fails to send to the Accountant in Bankruptcy in accordance with subsection (6A)(b) above such statement of assets and liabilities; or

(b) fails to disclose any material fact in such statement of assets and liabilities; or

(c) makes a material misstatement in such statement of assets and liabilities,

he shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale or to imprisonment for a term not exceeding 3 months or to both such fine and imprisonment.

(10) In any proceedings for an offence under subsection (9) above, it shall be a defence for the accused to show that he had a reasonable excuse for—

(a) failing to send to the Accountant in Bankruptcy in accordance with subsection (6A)(b) above such statement of assets and liabilities; or

(b) failing to disclose a material fact; or

(c) making a material misstatement.”