(asp 3) - Explanatory Notes

Bankruptcy and Diligence etc. (Scotland) Act 2007

1. Introduction

2. The Act

   1. Commentary

      1. Part 1 – Bankruptcy

         1. Duration of bankruptcy

            1. Section 1 – Discharge of debtor

         2. Bankruptcy restrictions orders and undertakings

            1. Section 2 – Bankruptcy restrictions orders and undertakings

               1. New section 56A – Bankruptcy restrictions order

               2. New section 56B – Grounds for making order

               3. New section 56C – Application of section 67(9)

               4. New section 56D – Timing of application for order

               5. New section 56E – Duration of order and application for annulment

               6. New section 56F – Interim bankruptcy restrictions order

               7. New section 56G – Bankruptcy restrictions undertaking

               8. New section 56H – Bankruptcy restrictions undertakings: application of section 67(9)

               9. New section 56J– Effect of recall of sequestration

               10. New section 56K – Effect of discharge on approval of offer of composition

         3. Effect of bankruptcy restrictions orders and undertakings

            1. Section 3 – Disqualification from being appointed as receiver

            2. Section 4 – Disqualification for nomination, election and holding office as member of local authority

            3. Section 5 – Orders relating to disqualification

         4. The trustee in the sequestration

            1. Section 6 – Amalgamation of offices of interim trustee and permanent trustee

            2. Section 7 – Repeal of trustee’s residence requirement

            3. Section 8 – Duties of trustee

            4. Section 9 – Grounds for resignation or removal of trustee

            5. Section 10 – Termination of interim trustee’s functions

               1. New section 13A – Termination of interim trustee’s functions where not appointed as trustee

               2. New section 13B – Termination of Accountant in Bankruptcy’s functions as interim trustee where not appointed as trustee

            6. Section 11 – Statutory meeting and election of trustee

            7. Section 12 – Replacement of trustee acting in more than one sequestration

            8. Section 13 – Requirement to hold money in interest bearing account

         5. Debtor applications

            1. Section 14 – Debtor applications

            2. Section 15 – Debtor applications by low income, low asset debtors

               1. New section 5A – Debtor applications by low income, low asset debtors

         6. Jurisdiction

            1. Section 16 – Sequestration proceedings to be competent only before sheriff

         7. Vesting of estate and dealings of debtor

            1. Section 17 -Vesting of estate and dealings of debtor

         8. Income received by debtor after sequestration

            1. Section 18 – Income received by debtor after sequestration

         9. Debtor’s home and other heritable property

            1. Section 19 – Debtor’s home and other heritable property

               1. New section 39A – Debtor’s home ceasing to form part of sequestrated estate

         10. Protected trust deeds

             1. Section 20 – Modification of provisions relating to protected trust deeds

         11. Modification of composition procedure

             1. Section 21 – Modification of composition procedure

         12. Status and powers of Accountant in Bankruptcy

             1. Section 22 – Status of Accountant in Bankruptcy as officer of the court

             2. Section 23 – Accountant in Bankruptcy’s power to investigate trustees under protected trust deeds

         13. Offences

             1. Section 24 – Modification of offences under section 67 of the 1985 Act

         14. Miscellaneous and general

             1. Section 25 - Debt limits in sequestrations

             2. Section 26 – Creditor to provide debt advice and information package

             3. Section 27 – Continuation of sequestration proceedings

             4. Section 28 – Abolition of summary administration

             5. Section 29 – Non-vested contingent interest reinvested in debtor

             6. Section 30 – Debtor’s requirement to give account of state of affairs

             7. Section 31 – Restriction of debtor’s rights to appeal under sections 49(6) and 53(6) of the 1985 Act

             8. Section 32 – Status of order on petition to convert protected trust deed into sequestration

             9. Section 33 – Power to provide for lay representation in sequestration proceedings

             10. Section 34 – Treatment of student loans on sequestration

             11. Section 35 – Certain regulations under the 1985 Act: procedure

      2. Schedule 1 – Minor and Consequential Amendments of the 1985 Act (Introduced by Section 36)

         1. New section 10 – Duty to notify existence of concurrent proceedings for sequestration or analogous remedy

         2. New section 10A – Powers in relation to concurrent proceedings for sequestration or analogous remedy

      3. Part 2 – Floating Charges

         1. Registration and creation etc.

            1. Section 37 – Register of Floating Charges

            2. Section 38 – Creation of floating charges

            3. Section 39 – Advance notice of floating charges

            4. Section 40 – Ranking of floating charges

            5. Section 41 – Ranking clauses

            6. Section 42 – Assignation of floating charges

            7. Section 43 – Alteration of floating charges

            8. Section 44 – Discharge of floating charges

            9. Section 45 – Effect of floating charges on winding up

            10. Section 46 – Repeals, savings and transitional arrangements

            11. Section 47 – Interpretation

         2. Related further provision

            1. Section 48 – Formalities as to documents

            2. Section 49– Industrial and provident societies

      4. Part 3 – Enforcement

         1. Scottish Civil Enforcement Commission

            1. Section 50 – Scottish Civil Enforcement Commission

      5. Schedule 2 – the Scottish Civil Enforcement Commission (Introduced by Section 50)

         1. Section 51 – Information and annual report

         2. Section 52 – Publication of guidance and other information

         3. Section 53 – Published information not to enable identification

         4. Section 54 – Register of judicial officers

         5. Section 55 – Code of practice

         6. Section 56 – Publication of information relating to informal debt collection

         7. Judicial Officers

            1. Section 57 – Judicial Officers

            2. Section 58 – Appointment of judicial officer

            3. Section 59 – Annual fee

         8. Abolition of offices of messenger-at-arms and sheriff officer

            1. Section 60 – Abolition of offices of messenger-at-arms and sheriff officer

         9. Regulation of judicial officers

            1. Section 61 – Regulation of judicial officers

            2. Section 62 – Duty to notify Commission of bankruptcy etc.

         10. Judicial officers’ professional association

             1. Section 63 – Judicial officers’ professional association

             2. Section 64 – Duty of professional association to forward complaints to Commission

             3. Section 65 – Information from professional association

         11. Investigation of judicial officers

             1. Section 66 – Inspection of judicial officer

             2. Section 67 – Investigation of alleged misconduct by judicial officer

             3. Section 68 – Suspension of judicial officer pending outcome of disciplinary or criminal proceedings

             4. Section 69 – Commission’s duty in relation to offences or misconduct by judicial officer

             5. Section 70 – Commission’s power in relation to judicial officer’s bankruptcy etc.

         12. Disciplinary proceedings

             1. Section 71 – Referrals to the disciplinary committee

             2. Section 72 – Disciplinary committee’s powers

             3. Section 73 – Orders under sections 68 and 72: supplementary provision

         13. Appeals

             1. Section 74 – Appeals from decisions under sections 58, 68 and 72

         14. Miscellaneous

             1. Section 75 – Judicial officer’s actions void where officer has interest

             2.  Section 76 – Measure of damages payable by judicial officer for negligence or other fault

             3. Section 77 – Effect of code of practice

             4. Section 78 – Electronic publications and communications

      6. Part 4 – Land Attachment and Residual Attachment

         1. Chapter 1 – Abolition of adjudication for debt

            1. Section 79 – Abolition of adjudication for debt

            2. Section 80 – Renaming of the Register of Inhibitions and Adjudications

         2. Chapter 2 – Attachment of land

            1. Land attachment

               1. Section 81 – Land attachment

               2. Section 82 – Attachable land

               3. Section 83 – Notice of land attachment

            2. Consequences of land attachment

               1. Section 84 – Debts secured by land attachment not rendered heritable

               2. Section 85 – Restriction on priority of ranking of certain securities

                  1. New section 13A – Effect of subsequent land attachment on ranking of standard securities

               3. Section 86 – Lease granted after registration of notice of land attachment

               4. Section 87 – Assignation of title deeds etc.

               5. Section 88 – Acquisition of right to execute land attachment

               6. Section 89 – Effect of debtor’s death before land attachment created

               7. Section 90 – Effect of debtor’s death after land attachment created

               8. Section 91 – Caveat by purchaser under missives

            3. Preparations for sale of attached land

               1. Section 92 – Application for warrant to sell attached land

               2. Section 93 – Notice to local authority of application for warrant for sale

               3. Section 94 – Preliminary hearing on application for warrant to sell

               4. Section 95 – Valuation report

               5. Section 96 – Creditor’s duties prior to full hearing on application for warrant for sale

               6. Section 97 – Full hearing on application for warrant for sale

               7. Section 98 – Application for warrant for sale of sole or main residence

               8. Section 99 – Protection of purchaser under contract where creditor applies for warrant for sale

               9. Section 100 – Protection of purchaser under contract where warrant for sale granted

               10. Section 101 – Provision supplementary to sections 99 and 100

               11. Section 102 – Warrant for sale of attached land owned in common

               12. Section 103 – Intimation of sheriff’s decision at full hearing

               13. Section 104 – Supplementary orders as respects sale

               14. Section 105 – Effect of certain refusals of application for warrant for sale under section 97(5)

               15. Section 106 – Termination of debtor’s right to occupy land

               16. Section 107 – Consequences of giving notice under section 106(1)

            4. The sale

               1. Section 108 – Appointed person

               2. Section 109 – Method of sale

               3. Section 110 – Legal incapacity or disability of debtor not to affect title of purchaser

               4. Section 111 – Title of purchaser not to be affected by certain irregularities

               5. Section 112 – Effect of registration of disposition on securities

               6. Section 113 – Report of sale

               7. Section 114 – Audit of report of sale

               8. Section 115 – Sheriff’s consideration of report

               9. Section 116 – Proceeds of sale

            5. Foreclosure

               1. Section 117 – Foreclosure

               2. Section 118 – Registration of decree of foreclosure

            6. Payments to account and expenses

               1. Section 119 – Ascription

               2. Section 120 – Expenses of land attachment

            7. Termination, discharge etc. of land attachment

               1. Section 121 – Termination by payment etc.

               2. Section 122 – Discharge

               3. Section 123 – Recall and restriction of land attachment

               4. Section 124 – Duration of land attachment

            8. Land attachment subsequent to reduction of deed granted in breach of inhibition

               1. Section 125 – Land attachment subsequent to reduction of deed granted in breach of inhibition

            9. General and miscellaneous

               1. Section 126 – Land attachment as heritable security

               2. Section 127 – Statement on impact of land attachment

               3. Section 128 – Interpretation

         3. Chapter 3 – Residual attachment

            1. Residual attachment

               1. Section 129 – Residual attachment

            2. Application for residual attachment order

               1. Section 130 – Application for residual attachment order

               2. Section 131 – Effect of application for residual attachment order

            3. Residual attachment order

               1. Section 132 – Residual attachment order

               2. Section 133 – Schedule of residual attachment

               3. Section 134 – Creation and effect of residual attachment

            4. Satisfaction order

               1. Section 135 – Application for satisfaction order

               2. Section 136 – Satisfaction order

               3. Section 137 – Intimation of court’s decision

               4. Section 138 – Effect of certain refusals of application for satisfaction order

            5. Termination, discharge etc. of residual attachment

               1. Section 139 – Termination by payment etc.

               2. Section 140 – Recall

               3. Section 141 – Duration of residual attachment

               4. Section 142 – Effect of death of debtor

            6. General and miscellaneous

               1. Section 143 – Expenses of residual attachment

               2. Section 144 – Ascription

               3. Section 145 – Interpretation

      7. Part 5 – Inhibition

         1. Creation

            1. Section 146 – Certain decrees and documents of debt to authorise inhibition without need for letters of inhibition

            2. Section 147 – Provision of debt advice and information package when executing inhibition

            3. Section 148 – Registration of inhibition

            4. Section 149 – Date on which inhibition takes effect

         2. Effect

            1. Section 150 – Property affected by inhibition

            2. Section 151 – Effect on inhibition to enforce obligation when alternative decree granted

            3. Section 152 – Effect of conversion of limited inhibition on the dependence to inhibition in execution

            4. Section 153 – Property affected by inhibition to enforce obligation to convey heritable property

            5. Section 154 – Inhibition not to confer a preference in ranking

            6. Section 155 – Power of receiver or liquidator in creditors’ voluntary winding up to dispose of property affected by inhibition

         3. Termination

            1. Section 156 – Termination of effect of inhibition

            2. Section 157 – Inhibition terminated by payment of full amount owing

            3. Section 158 – Inhibition terminated by compliance with obligation to perform

            4. Section 159 – Termination of inhibition when property acquired by third party

         4. Breach

            1. Section 160 – Breach of inhibition

            2. Section 161 – Prescription of right to reduce transactions in breach of inhibition

            3. Section 162 – Registration of notice of litigiosity and discharge of notice

               1. New section 159A – Registration of notice of summons of action of reduction

            4. Section 163 – Reduction of lease granted in breach of inhibition

         5. General and miscellaneous

            1. Section 164 – Power to prescribe forms in the 1868 Act

            2. Section 165 – Expenses of inhibition

            3. Section 166 – Ascription

            4. Section 167 – Keeper’s duty to enter inhibition on title sheet

            5. Section 168 – Inhibition effective against judicial factor

      8. Part 6 – Diligence on the Dependence

         1. Section 169 – Diligence on the dependence

            1. Availability of diligence on the dependence

               1. New section 15A – Diligence on the dependence of action

            2. New section 15B – Diligence on the dependence of petition

            3. New section 15C – Diligence on the dependence to secure future or contingent debts

            4. Application for diligence on the dependence

               1. New section 15D – Application for diligence on the dependence

            5. New section 15E – Grant of warrant without a hearing

            6. New section 15F – Hearing on application

            7. Execution before service

               1. New section 15G – Execution of diligence before service of summons

            8. Restriction on property attached

               1. New section 15H – Sum attached by arrestment on dependence

            9. New section 15J – Property affected by inhibition on dependence

            10. Recall etc. of diligence on the dependence

                1. New section 15K – Recall or restriction of diligence on dependence

            11. New section 15L – Variation of orders and variation or recall of conditions

            12. General and miscellaneous

                1. New section 15M – Expenses of diligence on the dependence

            13. New section 15N – Application of this Part to admiralty actions

         2. Section 170 – Prescription of arrestment

            1. New section 95A – Prescription of arrestment

         3. Section 171 – Abolition of letters of loosing

         4. Section 172 – Abolition of adjudication in security

      9. Part 7 – Interim Attachment

         1. Section 173 – Interim attachment

            1. Interim attachment

               1. New section 9A – Interim attachment

            2. New section 9B – Articles exempt from interim attachment

            3. Application for interim attachment

               1. New section 9C – Application for warrant for interim attachment

            4. New section 9D – Grant of warrant without a hearing

            5. New section 9E – Hearing on application

            6. Execution of interim attachment

               1. New section 9F – Execution of interim attachment

            7. New section 9G – Execution of interim attachment before service

            8. Interim attachment: further procedure

               1. New section 9H – Order for security of attached articles

            9. Interim attachment: effects

               1. New section 9J – Unlawful acts after interim attachment

            10. New section 9K – Articles belonging to or owned in common by a third party

            11. New section 9L – Duration of interim attachment

            12. Recall etc. of interim attachment

                1. New section 9M – Recall or restriction of interim attachment

            13. New section 9N – Variation of orders and variation or recall of conditions

            14. General and miscellaneous provisions

                1. New section 9P – Expenses of interim attachment

            15. New section 9Q – Recovery of expenses of interim attachment

            16. New section 9R – Ascription of sums recovered while interim attachment is in effect

            17. New section 9S – Ranking of interim attachment

      10. Part 8 – Attachment of Money

          1. Money attachment

             1. Section 174 – Money attachment

             2. Section 175 – Meaning of “money” and related expressions

             3. Section 176 – When money attachment not competent

          2. Execution of money attachment

             1. Section 177 – Removal of money attached

             2. Section 178 – Presumption of ownership

             3. Section 179 – Schedule of money attachment

             4. Section 180 – Valuation of banking instruments

             5. Section 181 – Order for realisation of money likely to deteriorate in value

             6. Section 182 – Report of money attachment

          3. Release of money attached

             1. Section 183 – Creditor’s application for payment order

             2. Section 184 – Effect of payment order

             3. Section 185 – Release of money where attachment unduly harsh

             4. Section 186 – Invalidity and cessation of money attachment

             5. Section 187 – Termination of money attachment

             6. Section 188 – Redemption of banking instrument

          4. Statement of money attachment

             1. Section 189 – Final statement of money attachment

             2. Section 190 – Audit of final statement under section 189(1)

          5. General and miscellaneous

             1. Section 191 – Money in common ownership

             2. Section 192 – Procedure where money owned in common is disposed of

             3. Section 193 – Unlawful acts after money attachment

             4. Section 194 – Appeals

             5. Section 195 – Recovery from debtor of expenses of money attachment

             6. Section 196 – Liability for expenses of money attachment

      11. Schedule 3 – Expenses of Money Attachment (Introduced by Section 196)

          1. Section 197 – Ascription

          2. Section 198 – Interpretation

      12. Part 9 – Diligence Against Earnings

          1. Section 199 – Simultaneous operation of arrestments against earnings where net earnings insufficient

          2. Section 200 – Arrestment of earnings: deductions from holiday pay

             1. New section 49A – Deductions where net earnings include holiday pay

          3. Section 201 – Provision of debt advice and information package

          4. Section 202 – Intimation of arrestment schedule

          5. Section 203 – Provision of information

             1. New section 70A – Employer’s duty to provide information

             2. New section 70B – Failure to give notice under section 70A(5)

             3. New section 70C – Creditor’s duty to provide information

             4. New section 70D – Debtor’s duty to provide information

          6. Section 204 – Conjoined arrestment orders: jurisdiction

          7. Section 205 – Arrestment of seamen’s wages

      13. Part 10 – Arrestment in Execution and Action of Furthcoming

          1. Section 206 – Arrestment in execution

             1. New section 73A – Arrestment and action of furthcoming to proceed only on decree or document of debt

             2. New section 73B – Schedule of arrestment to be in prescribed form

             3. New section 73C – Arrestment on the dependence followed by decree

             4. New section 73D – Debt advice and information

             5. New section 73E – Funds attached

             6. New section 73F – Protection of minimum balance in certain bank accounts

             7. New section 73G – Arrestee’s duty of disclosure

             8. New section 73H – Failure to disclose information

             9. New section 73J – Automatic release of arrested funds

             10. New section 73K – Sum released under section 73J(2)

             11. New section 73L – Circumstances preventing automatic release

          2. Section 73M – Notice of objection

             1. New section 73N – Hearings following notice of objection

             2. New section 73P – Arrestee not liable for funds released in good faith

             3. New section 73Q – Application for release of property where arrestment unduly harsh

             4. New section 73R – Hearing on application under section 73Q for release of property

             5. New section 73S – Mandate to be in prescribed form

             6. New section 73T – Arrestment of ships etc.

      14. Part 11 – Maills and Duties, Sequestration for Rent and Landlord’s Hypothec

          1. Abolition of maills and duties

             1. Section 207 – Abolition of maills and duties

          2. Landlord’s hypothec and sequestration for rent

             1. Section 208 – Abolition of sequestration for rent and restriction of landlord’s hypothec

      15. Part 12 – Summary Warrants, Time to Pay and Charges to Pay

          1. Section 209 – Summary warrants, time to pay and charges to pay

             1. 210 – Time to pay directions and time to pay orders

      16. Part 13 – Amendments of the Debt Arrangement and Attachment (Scotland) Act 2002

          1. Section 211 – Debt payment programmes with debt relief

             1. New section 7A – Debt payment programmes: power to make provision about debt relief

          2. Section 212 – Further amendments of the Debt Arrangement and Attachment (Scotland) Act 2002

             1. New section 19A – Urgent removal of attached articles

             2. New section 60A – Electronic signatures

      17. Part 14 – Admiralty Actions and Arrestment of Ships

          1. Section 213 – Admiralty actions and the arrestment of ships: modification of enactments

      18. Schedule 4 – Modifications of Enactments Relating to Admiralty Actions and the Arrestment of Ships (Introduced by Section 213)

          1. Definition of “maritime lien”

          2. The term “admiralty action”

          3. Arrestment in rem granted by the sheriff

          4. New section 47A – Execution of warrant to arrest in rem and of order for sale

          5. Arrestment on the dependence

          6. Liability for losses and expenses

          7. New section 47B – Expenses

          8. Factors affecting arrestments

          9. New section 47C – Competence of arresting cargo

          10. New section 47D – Arrestment of cargo: restriction on movement of ship

          11. Cargo on board a ship exempt from attachment

          12. Location of a ship when arrestment executed

          13. Demise charters

          14. New section 47E – Sale of ship arrested on the dependence of action against demise charterer

          15. New section 47F – Ranking of arrestments on sale of ship chartered by demise

          16. New section 47G – Ranking of arresting creditor of demise charterer in sequestration or winding up of owner

          17. New section 47H – Arrestment to found jurisdiction in action against demise charterer

      19. Part 15 - Action for Removing from Heritable Property

          1. Section 214 – Expressions used in this part

          2. Section 215 – Procedure for execution of removing

          3. Section 216 – Service of charge before removing

          4. Section 217 – When removing not competent

          5. Section 218 – Preservation of property left in premises

          6. Section 219 – Caution for pecuniary claims

      20. Part 16 – Disclosure of Information

          1. Section 220 – Information disclosure

      21. Part 17 – General and Miscellaneous

          1. Execution of diligence: electronic standard securities

             1. Section 222 – Registration and execution of electronic standard securities

          2. New section 6A – Registration for preservation and execution of electronic standard securities

          3. General

             1. Section 223 – Crown application

             2. Section 224 – Orders and regulations

             3. Section 226 – Minor and consequential amendments and repeals

      22. Schedule 5 – Minor and Consequential Amendments (Introduced by Section 226)

          1. Paragraph 10 - Sheriff Courts (Scotland) Act 1971

          2. Paragraph 13(3) - Bankruptcy (Scotland) Act 1985

          3. Paragraph 16 – Debtors (Scotland) Act 1987

          4. Paragraph 30(4) – Debt Arrangement and Attachment (Scotland) Act 2002

             1. New section 13A – schedule of attachment

3. Parliamentary History