PART 2

Sequestration: award and recall

Recall of sequestration

Recall of sequestration where Accountant in Bankruptcy is trustee
35
1
This section applies where AiB—
a
is the trustee, and
b
either—
i
receives an application under section 31, or
ii
considers recall of an award of sequestration may be granted on the ground that the debtor has paid, or is able to pay, the debtor's debts in full (including the payment of any interest payable on the debtor’s debts and the payment of the outlays and remuneration of the interim trustee and the trustee).
2
AiB must—
a
where an application under section 31 is received, notify every creditor known to AiB that the application has been made within 7 days beginning with the day on which the application is received,
b
where AiB is acting on its own accord, notify the debtor and every creditor known to AiB that AiB considers subsection (1) applies.
2A
At the same time as giving notice under subsection (2)(b), AiB must give to the persons mentioned in subsection (2B) a notice informing the recipient that the person has a right to make representations to AiB in relation to the notification within 21 days beginning with the day on which the notice is given.
2B
The persons are—
a
the debtor, and
b
any person who was a petitioner for, or concurred in a debtor application for, the sequestration.
3
If a creditor has not previously submitted a claim under section 46 or 122, the creditor must, in order for the creditor's claim to a dividend out of the debtor's estate to be considered, submit a claim.
4
The claim must be submitted—
a
in accordance with section 46(2) to (4), and
b
within 14 days beginning with the day on which notice is given under subsection (2).
5
Before recalling an award of sequestration AiB must—
a
take into account any representations made by an interested person within 21 days beginning with the day on which notice is given under subsection (2A) or, as the case may be, section 31(3)(b), and
b
make a determination of AiB's fees and outlays calculated in accordance with regulations under section 205.
6
AiB may recall an award of sequestration if satisfied that—
a
the debtor has paid the debtor's debts in full , including the payment in full of—
i
any interest payable on the debtor’s debts (see section 37A),
ii
the outlays and remuneration of the interim trustee and of the trustee,
b
those debts were paid in full within 8 weeks after the days mentioned in subsection (5)(a) have expired, and
c
in all the circumstances it is appropriate to recall it.
6A
AiB may not recall an award of sequestration after—
a
where no appeal is made under section 37(5)(a), the day which is 9 weeks after the days mentioned in subsection (5)(a) have expired, or
b
where such an appeal is made, such later day which is 14 days after the day on which the appeal is finally determined or abandoned.
6B
If AiB does not under subsection (6) recall an award of sequestration, the sequestration must continue but is to be subject to such conditions as AiB thinks fit.
6C
Despite notice being given under subsection (2)(b), the proceedings in the sequestration are to continue as if the notification had not been made until a recall of an award of sequestration is granted under subsection (6) (subject to any conditions imposed under subsection (6B)).
7
Without delay after recalling an award of sequestration under subsection (6), AiB must send a certified copy of the decision to the Keeper of the Register of Inhibitions for recording in that register.
S. 35 in force at 30.11.2016 by S.S.I. 2016/294, reg. 2
S. 35 heading substituted (25.6.2025) by Bankruptcy and Diligence (Scotland) Act 2024 (asp 9), ss. 4(7)(f), 22(2); S.S.I. 2025/107, reg. 2(2)(a) (with reg. 4)
Words in s. 35(1)(b) inserted (25.6.2025) by Bankruptcy and Diligence (Scotland) Act 2024 (asp 9), ss. 4(7)(a)(i), 22(2); S.S.I. 2025/107, reg. 2(2)(a) (with reg. 4)
Word in s. 35(1)(b) substituted (25.6.2025) by Bankruptcy and Diligence (Scotland) Act 2024 (asp 9), ss. 4(7)(a)(ii), 22(2); S.S.I. 2025/107, reg. 2(2)(a) (with reg. 4)
S. 35(2)(a)(b) inserted (25.6.2025) by Bankruptcy and Diligence (Scotland) Act 2024 (asp 9), ss. 4(7)(b), 22(2); S.S.I. 2025/107, reg. 2(2)(a) (with reg. 4)
S. 35(2A)(2B) inserted (25.6.2025) by Bankruptcy and Diligence (Scotland) Act 2024 (asp 9), ss. 4(7)(c), 22(2); S.S.I. 2025/107, reg. 2(2)(a) (with reg. 4)
Words in s. 35(5)(a) substituted (25.6.2025) by Bankruptcy and Diligence (Scotland) Act 2024 (asp 9), ss. 4(7)(d), 22(2); S.S.I. 2025/107, reg. 2(2)(a) (with reg. 4)
S. 35(6A)-(6C) inserted (25.6.2025) by Bankruptcy and Diligence (Scotland) Act 2024 (asp 9), ss. 4(7)(e), 22(2); S.S.I. 2025/107, reg. 2(2)(a) (with reg. 4)
Words in s. 35(1)(b) inserted (25.6.2025) by Bankruptcy and Diligence (Scotland) Act 2024 (asp 9), ss. 5(5)(a), 22(2); S.S.I. 2025/107, reg. 2(2)(b)
S. 35(6)(a)(i)(ii) substituted for words (25.6.2025) by Bankruptcy and Diligence (Scotland) Act 2024 (asp 9), ss. 5(5)(b), 22(2); S.S.I. 2025/107, reg. 2(2)(b)