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Bankruptcy (Scotland) Act 2016

Type Act of the Scottish Parliament

Publication 2016-04-28

Last updated 2025-06-25

State In force

Jurisdiction Scotland

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(5) Notice under subsection (4) must be given in such form and manner as may be prescribed.

(6) For the purposes of subsection (3), any reference in subsection (2) to the granting of the application is to be construed as a reference to the granting of decree in the action.

(7) In this section—

“family home” means any property in which, at the relevant date, the debtor had a right or interest (whether alone or in common with another person), being property which was occupied at that date as a residence—by—the debtor and the debtor's spouse or civil partner,the debtor's spouse or civil partner,the debtor's former spouse or former civil partner,in any of those cases, whether with or without a child of the family, orby the debtor with a child of the family,

“child of the family” includes—any child or grandchild of either—the debtor, orthe debtor's spouse or civil partner (or former spouse or civil partner), andany person who has been brought up or accepted by either—the debtor, orthe debtor's spouse or civil partner (or former spouse or civil partner),as if a child of the debtor, spouse, civil partner or former spouse or civil partner,(whatever age the child, grandchild or person may be),

“relevant consent” means, in relation to the sale or disposal of any right or interest in a family home—in a case where the family home is occupied by the debtor's spouse or civil partner (or former spouse or civil partner), the consent of the spouse or civil partner (or as the case may be former spouse or civil partner) whether or not the family home is also occupied by the debtor,where paragraph (a) does not apply, in a case where the family home is occupied by the debtor with a child of the family, the consent of the debtor, and

“relevant date” means the day immediately preceding the date of sequestration or, as the case may be, the day immediately preceding the date the trust deed was granted.

Rights of spouse or civil partner

Protection of rights of spouse against arrangements intended to defeat them

114

(1) Subsections (2) and (3) apply where a debtor's sequestrated estate includes a matrimonial home in respect of which—

(a) the debtor, immediately before the date the order was made appointing the trustee, was an entitled spouse, and

(b) the other spouse is a non-entitled spouse.

(2) Where the trustee in the sequestration knows—

(a) that the debtor is married to the non-entitled spouse, and

(b) where the non-entitled spouse is residing,

the trustee must inform the non-entitled spouse, within 14 days beginning with the date mentioned in subsection (1)(a), of the fact that sequestration of the debtor's estate has been awarded, of the right of petition which exists under section 29 and of the effect of subsection (3).

(3) On the petition under section 29 of the non-entitled spouse presented either within 40 days beginning with the date mentioned in subsection (1)(a) or within 10 weeks beginning with the date of the award of sequestration the sheriff, if satisfied that the purpose of the petition for sequestration, or as the case may be the debtor application, was wholly or mainly to defeat the occupancy rights of the non-entitled spouse, may—

(a) under section 30, recall the sequestration, or

(b) make such order as the sheriff thinks appropriate to protect the occupancy rights of the non-entitled spouse.

(4) The reference in subsection (1)(a) to the date the order is made appointing the trustee is, in a case where more than one trustee is appointed in the sequestration, to be construed as a reference to the date the first order is made appointing a trustee.

(5) In this section—

“entitled spouse” and “non-entitled spouse” are to be construed in accordance with section 6 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981,

“matrimonial home” has the meaning given by section 22 of that Act, and

“occupancy rights” has the meaning given by section 1(4) of that Act.

Protection of rights of civil partner against arrangements intended to defeat them

115

(1) Subsections (2) and (3) apply where a debtor's sequestrated estate includes a family home in respect of which—

(a) the debtor, immediately before the date the order was made appointing the trustee, was an entitled partner, and

(b) the other partner in the civil partnership is a non-entitled partner.

(2) Where the trustee in the sequestration knows—

(a) that the debtor is in civil partnership with the non-entitled partner, and

(b) where the non-entitled partner is residing,

the trustee must inform the non-entitled partner, within 14 days beginning with the date mentioned in subsection (1)(a), of the fact that sequestration of the debtor's estate has been awarded, of the right of petition which exists under section 29 and of the effect of subsection (3).

(3) On the petition under section 29 of the non-entitled partner presented either within 40 days beginning with the date mentioned in subsection (1)(a) or within 10 weeks beginning with the date of the award of sequestration the sheriff, if satisfied that the purpose of the petition for sequestration, or as the case may be the debtor application, was wholly or mainly to defeat the occupancy rights of the non-entitled partner, may—

(a) under section 30, recall the sequestration, or

(b) make such order as the sheriff thinks appropriate to protect the occupancy rights of the non-entitled partner.

(4) The reference in subsection (1)(a) to the date the order is made appointing the trustee is, in a case where more than one trustee is appointed in the sequestration, to be construed as a reference to the date the first order is made appointing a trustee.

(5) In this section—

“entitled partner” and “non-entitled partner” are to be construed in accordance with section 101 of the Civil Partnership Act 2004,

“family home” has the meaning given by section 135 of that Act, and

“occupancy rights” means the rights conferred by section 101(1) of that Act.

Account of state of affairs

Debtor’s account of state of affairs

116

(1) This section applies to a debtor who—

(a) has not been discharged under this Act, or

(b) is subject to a debtor contribution order.

(2) The trustee in the sequestration must, at the end of—

(a) 6 months beginning with the date of sequestration, and

(b) each subsequent 6 months,

require the debtor to give an account in writing, in such form as may be prescribed, of the debtor's current state of affairs.

Financial education for debtor

117

(1) The trustee must notify a living debtor that the debtor is required to undertake a prescribed course of financial education (a “financial education course”) specified by the trustee if, in the opinion of the trustee—

(a) any of the circumstances mentioned in subsection (2) applies, and

(b) undertaking the course would be appropriate for the debtor.

(2) The circumstances are—

(a) that in the 5 years ending on the date on which the sequestration was awarded—

(i) the debtor's estate was sequestrated,

(ii) the debtor granted a protected trust deed,

(iii) an analogous remedy (as defined in section 17(8)) was in force in respect of the debtor, or

(iv) the debtor participated in a debt management programme under which the debtor made regular payments,

(b) that the debtor is subject to, or under investigation with a view to an application being made for, a bankruptcy restrictions order,

(c) that the trustee considers that the pattern of the debtor's behaviour, whether before or after the award of sequestration, is such that the debtor would benefit from a financial education course, and

(d) that the debtor agrees to undertake a financial education course.

(3) The trustee must decide whether to issue a notification under subsection (1)—

(a) within 6 months beginning with the date of the award of sequestration, and

(b) in a case where section 143 applies, as soon as reasonably practicable after—

(i) the trustee ascertains the whereabouts of the debtor, or

(ii) the debtor makes contact with the trustee.

(4) A debtor must not be required to undertake or, as the case may be, complete the financial course specified by the trustee if, in the opinion of the trustee, the debtor—

(a) is unable to participate in the course as a result of the debtor's health (including by reason of disability or of physical or mental illness), or

(b) has completed a financial education course in the 5 years ending on the date on which the sequestration of the debtor's estate was awarded.

(5) Regulations under subsection (1) may in particular—

(a) prescribe the content, format and method of delivery of a course,

(b) prescribe different courses for different circumstances, or

(c) make provision for particular courses to be specified by a trustee where particular circumstances in subsection (2) apply.

(6) In subsection (2)(a)(iv), “debt management programme” includes in particular a programme approved in accordance with section 2 of the 2002 Act.

PART 9 — Examination of debtor

Private and public examination

Private examination

118

(1) The trustee in the sequestration may request—

(a) the debtor to appear before the trustee and to give information relating to the debtor's assets, the debtor's dealings with them or the debtor's conduct in relation to the debtor's business or financial affairs, or

(b) the debtor's spouse or civil partner, or any other person who the trustee believes can give such information to give that information.

(2) In this Act any such spouse, civil partner or other person is referred to as a “relevant person”.

(3) The trustee may, if the trustee considers it necessary, apply to the sheriff for an order to be made under subsection (4).

(4) On an application under subsection (3), the sheriff may make an order requiring the debtor or a relevant person to attend for private examination before the sheriff on a date and at a time specified in the order.

(5) But subsection (4) is subject to section 120(3).

(6) A date specified in an order under subsection (4) must be not earlier than 8 days nor later than 16 days after the date of the order.

(7) A person who fails without reasonable excuse to comply with an order under subsection (4) commits an offence.

(8) A person who commits an offence under subsection (7) is liable, on summary conviction—

(a) to a fine not exceeding level 5 on the standard scale, or

(b) to imprisonment for a term not exceeding 3 months,

or both to such fine and to such imprisonment.

(9) Where the debtor is an entity whose estate may be sequestrated by virtue of section 6(1), the references, in this section and in sections 119 to 121, to the debtor are to be construed, unless the context otherwise requires, as references to a person representing the entity.

Public examination

119

(1) At least 8 weeks before the end of the first accounting period the trustee in the sequestration—

(a) may, or

(b) if requested to do so by AiB or by the commissioners (if any) or by ¼ in value of the creditors, must,

apply to the sheriff for an order for the public examination before the sheriff of the debtor, or of a relevant person, relating to the debtor's assets, the debtor's dealings with those assets or the debtor's conduct in relation to the debtor's business or financial affairs.

(2) Except that on cause shown such application may be made by the trustee at any time.

(3) On an application under subsection (1), the sheriff must make an order requiring the debtor or the relevant person to attend for examination before the sheriff in open court on a date and at a time specified in the order.

(4) But subsection (3) is subject to section 120(3).

(5) A date specified in an order under subsection (3) must be not earlier than 8 days nor later than 16 days after the date of the order.

(6) On the sheriff making an order under subsection (3), the trustee must—

(a) send to AiB a notice in such form, and containing such particulars, as may be prescribed,

(b) send a copy of the notice—

(i) to every creditor known to the trustee, and

(ii) where the order is in respect of a relevant person, to the debtor, and

(7) AiB must enter particulars of the notice sent under subsection (6)(a) in the register of insolvencies.

(8) A person who fails without reasonable excuse to comply with an order under subsection (3) commits an offence.

(9) A person who commits an offence under subsection (8) is liable, on summary conviction—

(a) to a fine not exceeding level 5 on the standard scale, or

(b) to imprisonment for a term not exceeding 3 months,

or both to such fine and to such imprisonment.

Provisions ancillary to sections 118 and 119

120

(1) If a debtor or relevant person is residing in Scotland, the sheriff may on the application of the trustee grant a warrant (which may be executed by a messenger-at-arms or sheriff officer anywhere in Scotland) to apprehend the debtor or relevant person and to have the apprehended person taken to the place of the examination.

(2) But a warrant under subsection (1) must not be granted unless the sheriff is satisfied that it is necessary to grant it to secure the attendance of the debtor or relevant person at the examination.

(3) If the debtor or relevant person is for any good reason prevented from attending for examination, the sheriff may grant a commission to take the examination of the debtor or relevant person (the commissioner being, in this section and in section 121, referred to as an “examining commissioner”).

(4) Subsection (3) is without prejudice to subsection (5).

(5) The sheriff or the examining commissioner may at any time adjourn the examination to such day as the sheriff or examining commissioner may fix.

(6) The sheriff or examining commissioner may order the debtor or a relevant person to produce for inspection any document—

(a) in the custody or control of the person so ordered, and

(b) relating to the debtor's assets, the debtor's dealings with those assets or the debtor's conduct in relation to the debtor's business or financial affairs,

and to deliver the document or a copy of the document to the trustee in the sequestration for further examination by the trustee.

Conduct of examination

121

(1) The examination, whether before the sheriff or an examining commissioner, must be taken on oath.

(2) At the examination—

(a) the trustee in the sequestration (or a solicitor or counsel acting on behalf of the trustee) and, in the case of public examination, any creditor may question the debtor or a relevant person, and

(b) the debtor may question a relevant person,

as to any matter relating to the debtor's assets, the debtor's dealings with those assets or the debtor's conduct in relation to the debtor's business or financial affairs.

(3) The debtor or a relevant person—

(a) is required to answer any question relating to the debtor's assets, the debtor's dealings with those assets or the debtor's conduct in relation to the debtor's business or financial affairs, and

(b) is not excused from answering any such question on the ground—

(i) that the answer may incriminate, or tend to incriminate, the person questioned, or

(ii) of confidentiality.

(4) Except that—

(a) a statement made by the debtor or a relevant person in answer to any such question is not admissible in evidence in any subsequent criminal proceedings against the person making it (except where the proceedings are in respect of a charge of perjury relating to the statement), and

(b) a person subject to examination is not required to disclose any information received from a person not called for examination if the information is confidential between the two persons.

(5) The rules relating to the recording of evidence in ordinary causes specified in the first schedule of the Sheriff Courts (Scotland) Act 1907 apply in relation to the recording of evidence at the examination before the sheriff or examining commissioner.

(6) The debtor's deposition at the examination must be subscribed by the debtor and by the sheriff (or, as the case may be, the examining commissioner).

(7) The trustee must send a copy of the record of the examination to AiB.

(8) A relevant person is entitled, as if the person were a witness in an ordinary civil cause in the sheriff court, to fees or allowances in respect of the person's attendance at the examination.

(9) Except that the sheriff may disallow or restrict the entitlement to such fees or allowances if the sheriff thinks it appropriate to do so in all the circumstances.

PART 10 — Claims, dividends and distribution etc.

Submission and adjudication of claims

Submission of claims to trustee

122

(1) A creditor must submit a claim in accordance with this section to the trustee in the sequestration in order to obtain an adjudication as to that person's entitlement—

(a) to vote at a meeting of creditors other than the statutory meeting, or

(b) (so far as funds are available) to a dividend out of the debtor's estate in respect of any accounting period.

(2) Where the claim is by virtue of—

(a) paragraph (a) of subsection (1), it must be submitted at or before the meeting,

(b) paragraph (b) of that subsection, it must be submitted in accordance with subsection (4).

(3) But subsection (1) is subject to subsections (4), (7) and (8) and to section 131(6) to (9).

(4) A creditor must, in order to obtain an adjudication as to the creditor's entitlement (so far as funds are available) to a dividend out of the debtor's estate, submit a claim to the trustee not later than the relevant day.

(5) The “relevant day”, in relation to a creditor, means—

(a) where notice is given to the creditor under section 44(3), the day which is 120 days after the day on which that notice is given,

(b) where no such notice is given, the day which is 120 days after the day on which the trustee gives notice to the creditor inviting the submission of claims.

(6) If a creditor submits a claim to the trustee after the relevant day, the trustee may, in respect of any accounting period, provide an adjudication as to the creditor's entitlement (so far as funds are available) to a dividend out of the debtor's estate if—

(a) the claim is submitted not later than 8 weeks before the end of the accounting period, and

(b) there were exceptional circumstances which prevented the claim from being submitted before the relevant day.

(7) Subsection (8) applies as regards a claim submitted by a creditor—

(a) under section 46 and accepted in whole or in part by the trustee for the purpose of voting at the statutory meeting, or

(b) under this section and not rejected in whole.

(8) The claim is deemed to have been re-submitted for the purpose of obtaining an adjudication as to the creditor's entitlement both to vote at any subsequent meeting and (so far as funds are available) to a dividend in respect of an accounting period or as the case may be of any subsequent accounting period.

(9) A creditor submits a claim under this section by producing to the trustee—

(a) a statement of claim in the prescribed form, and

(b) an account or voucher (according to the nature of the debt) which constitutes prima facie evidence of the debt.

(10) But the trustee, with the consent of the commissioners if any, may dispense with any requirement under subsection (9) in respect of any debt or of any class of debt.

(11) Where a creditor (in this subsection referred to as “C”) neither resides, nor has a place of business, in the United Kingdom, the trustee—

(a) must, if the trustee knows where C does reside or have a place of business and if no notification has been given to C under section 44(3), write to C informing C that C may submit a claim under this section, and

(b) may allow C to submit an informal claim in writing.

(12) Where a creditor has submitted a claim under this section (or under section 46 a statement of claim which has been deemed re-submitted as mentioned in subsection (8)), the creditor may at any time submit a further claim under this section specifying a different amount for the creditor's claim.

(13) But a secured creditor is not entitled to produce a further claim specifying a different value for the security at any time after the trustee requires the secured creditor to discharge, or convey or assign, the security under paragraph 4(3) of schedule 2.

Evidence as to validity or amount of claim

123

(1) The trustee in the sequestration, for the purpose of being satisfied as to the validity or amount of a claim submitted by a creditor under section 122, may require—

(a) the creditor to produce further evidence, or

(b) any other person who the trustee believes can produce relevant evidence to produce such evidence.

(2) If the creditor (or as the case may be the other person) refuses or delays to do so, the trustee may apply to the sheriff for an order requiring the creditor (or the other person) to attend for private examination before the sheriff.

(3) At any private examination under subsection (2)—

(a) a solicitor or counsel may act on behalf of the trustee, or

(b) the trustee may appear on the trustee's own behalf.

(4) Sections 118(4) to (7) and 121(1) apply, subject to any necessary modifications, to the examination of the creditor (or the other person) as they apply to the examination of a relevant person.

(5) References in subsections (1) and (4) to the creditor in a case where the creditor is an entity mentioned in section 6(1) are to be construed, unless the context otherwise requires, as references to a person representing the entity.

False claims etc.

124

(1) Subsections (2) and (3) apply where a creditor produces under section 122 or 123—

(a) a statement of claim,

(b) account,

(d) other evidence,

which is false.

(2) The creditor commits an offence unless it is shown that the creditor neither knew nor had reason to believe that the statement of claim, account, voucher or other evidence was false.

(3) The debtor commits an offence if the debtor—

(a) knew, or became aware, that the statement of claim, account, voucher or other evidence was false, and

(b) failed, as soon as practicable after acquiring such knowledge, to report to the trustee that the statement of claim, account, voucher or other evidence was false.

(4) A person convicted of an offence under subsection (2) or (3) is liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum, or—

(i) in a case where the person has previously been convicted of an offence inferring dishonest appropriation of property or an attempt at dishonest appropriation of property, to imprisonment for a term not exceeding 6 months, or

(ii) in any other case, to imprisonment for a term not exceeding 3 months,

or both to a fine not exceeding the statutory maximum and to such imprisonment as is mentioned, in relation to the case in question, in sub-paragraph (i) or (ii), or

(b) on conviction on indictment—

(i) to a fine, or

(ii) to imprisonment for a term not exceeding 2 years,

or both to a fine and to such imprisonment.

Further provision as to claims

125

(1) A creditor may, in such circumstances as may be prescribed, state the amount of the creditor's claim under section 122 in foreign currency.

(2) The trustee in the sequestration must, on production of any document to the trustee for the purposes of any of sections 122 to 124—

(a) initial the document, and

(b) if requested by the person producing it, return it (if it is not a statement of claim) to that person.

(3) The submission of a claim under section 122 bars the effect of any enactment or rule of law relating to the limitation of actions.

(4) Schedule 2 has effect for determining the amount in respect of which the creditor is entitled to claim.

Adjudication of claims: general

126

(1) At the commencement of every meeting of creditors (other than the statutory meeting) the trustee in the sequestration must, for the purposes of section 128 so far as it relates to voting at the meeting, accept or reject the claim of each creditor.

(2) Subsection (3) applies where funds are available for payment of a dividend out of the debtor's estate in respect of an accounting period.

(3) For the purpose of determining who is entitled to such a dividend, the trustee—

(a) must, not later than 4 weeks before the end of the period, accept or reject every claim submitted (or deemed to have been re-submitted) to the trustee under this Act, and

(b) must, at the same time, make a decision on any matter required to be specified under paragraph (a) or (b) of subsection (7).

(4) The trustee must then, as soon as reasonably practicable, send a list of every claim so accepted or rejected (including its amount and whether it has been accepted or rejected) to the debtor and to every creditor known to the trustee.

(5) If the amount of a claim is stated in foreign currency, the trustee in adjudicating under subsection (1) or (3) on the claim must convert the amount into sterling, in such manner as may be prescribed, at the rate of exchange prevailing at the close of business on the date of sequestration.

(6) Where the trustee rejects a claim, the trustee must forthwith notify the claimant, giving reasons for the rejection.

(7) Where the trustee accepts or rejects a claim, the trustee must record the trustee's decision on the claim, specifying—

(a) the amount of the claim accepted by the trustee,

(b) the category of debt, and the value of any security, as decided by the trustee, and

(8) Any reference in this section or in section 127 to the acceptance or rejection of a claim is to be construed as a reference to the acceptance or rejection of the claim in whole or in part.

Adjudication of claims: review and appeal

127

(1) The debtor or any creditor may apply to AiB for a review of—

(a) the acceptance or rejection of any claim, or

(b) a decision in respect of any matter requiring to be specified under section 126(7)(a) or (b).

(2) The debtor may make an application under subsection (1) only if the debtor satisfies AiB that the debtor has, or is likely to have, a pecuniary interest in the outcome of the review.

(3) Any application under subsection (1) must be made, in the case of a review relating to an acceptance or rejection—

(a) under subsection (1) of section 126, within 14 days beginning with the day of the decision to accept or reject the claim, and

(b) under subsection (3) of that section, within 28 days beginning with that day.

(4) If an application under subsection (1) is made, AiB must—

(a) take into account any representations made by an interested party within 21 days beginning with the day on which the application is made, and

(b) confirm, amend or revoke the decision within 28 days beginning with that day.

(5) The debtor or any creditor may, within 14 days beginning with the day of a decision by AiB under subsection (4)(b), appeal to the sheriff against that decision.

(6) The debtor may appeal under subsection (5) only if the debtor satisfies the sheriff that the debtor has, or is likely to have, a pecuniary interest in the outcome of the appeal.

Entitlement to vote and draw a dividend

Voting and drawing a dividend

128

(1) A creditor whose claim has been accepted in whole or in part by the trustee in the sequestration or on review or appeal under section 127 is entitled, in a case where the acceptance is under (or on review or appeal arising from)—

(a) section 126(1), to vote on any matter at the meeting of creditors for the purpose of voting at which the claim is accepted, or

(b) section 126(3), to payment out of the debtor's estate of a dividend in respect of the accounting period for the purposes of which the claim is accepted.

(2) But—

(a) paragraph (a) of subsection (1) is subject to sections 70(1)(a) and 77(1) and (7)(b), and

(b) the entitlement mentioned in paragraph (b) of that subsection arises only in so far as the estate has funds available, having regard to section 129, to make the payment in question.

(3) No vote may be cast, by virtue of a debt, more than once on any resolution put to a meeting of creditors.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Distribution

Priority in distribution

129

(1) The funds of the debtor's estate must be distributed by the trustee in the sequestration to meet the following debts in the order in which they are mentioned—

(a) the outlays and remuneration of an interim trustee in the administration of the debtor's estate,

(b) the outlays and remuneration of the trustee in the sequestration in the administration of the debtor's estate,

(i) deathbed and funeral expenses reasonably incurred, and

(ii) expenses reasonably incurred in administering the deceased's estate,

(d) the expenses reasonably incurred by a creditor who is a petitioner for, or concurs in a debtor application for, sequestration,

(e) ordinary preferred debts (excluding any interest which has accrued on those debts to the date of sequestration),

(f) secondary preferred debts (excluding any interest which has accrued on those debts to the date of sequestration),

(g) ordinary non-preferential debts (that is to say, debts which are neither secured debts nor debts mentioned in any other paragraph of this subsection),

(ga) secondary non-preferential debts,

(gb) tertiary non-preferential debts,

(h) interest, between the date of sequestration and the date of payment of the debt, at the rate specified in subsection (10) on—

(i) the ordinary preferred debts,

(ii) the secondary preferred debts, ...

(iii) the ordinary non-preferential debts,

(iv) the secondary non-preferential debts, and

(v) the tertiary non-preferential debts.

(i) any postponed debt.

(2) In this Act—

“preferred debt” means a debt listed in Part 1 of schedule 3 of this Act,

“ordinary preferred debt” means a debt within any of paragraphs 1 to 6 of that Part, and

“secondary preferred debt” means a debt within any of paragraphs 7 to 8A of that Part.

(3) Part 2 of that schedule has effect for the interpretation of Part 1 of that schedule.

(3A) In subsection (1), “secondary non-preferential debts” and “tertiary non-preferential debts” have the meanings given by section 129A.

(4) In this Act, “postponed debt” means—

(a) a loan made to the debtor, in consideration of a share of the profits in the debtor's business, which is postponed under section 3 of the Partnership Act 1890 to the claims of other creditors,

(b) a loan made to the debtor by the debtor's spouse or civil partner, or

(i) anything vesting in the trustee by virtue of a successful challenge under section 98, or

(ii) the proceeds of sale of anything so vesting.

(5) A debt falling within any of paragraphs (c) to (i) of subsection (1) has the same priority as any other debt falling within the same paragraph and, where the funds of the estate are inadequate to enable the debts mentioned in the paragraph in question to be paid in full, those debts are to abate in equal proportions.

(6) Any surplus remaining after all the debts mentioned in this section have been paid in full must be made over to the debtor or the debtor's successors or assignees.

(7) In subsection (6), “surplus”—

(a) includes any kind of estate, but

(b) does not include any unclaimed dividend.

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) Nothing in this section affects—

(a) any right of a secured creditor which is preferable to the rights of the trustee,

(b) any preference of the holder of a lien over a title deed, or other document, which has been delivered to the trustee in accordance with a requirement under section 108(5).

(10) The rate of interest referred to in paragraph (h) of subsection (1) is whichever is the greater of—

(a) the prescribed rate at the date of sequestration, and

(b) the rate applicable to that debt apart from the sequestration.

Accounting periods

130

(1) The trustee in the sequestration must make up accounts of the trustee's intromissions with the debtor's estate in respect of each accounting period.

(2) In this Act, “accounting period” is to be construed as follows—

(a) the first accounting period is the period of 12 months, or such shorter period as may be determined or agreed in accordance with subsection (5), either period beginning with the date on which sequestration is awarded, and

(b) any subsequent accounting period is the period of 12 months beginning when its immediately preceding accounting period ends.

(3) But—

(a) paragraph (a) of subsection (2) is subject to subsection (4), and

(b) paragraph (b) of subsection (2) is subject to the exception that—

(i) in a case where AiB is not the trustee, the trustee and the commissioners (or, if there are no commissioners, the trustee and AiB) agree, or

(ii) in a case where AiB is the trustee, the trustee determines,

an accounting period is to be some other period beginning when its immediately preceding accounting period ends, it is that other period.

(4) Where the trustee was appointed under section 54(1) as interim trustee in the sequestration, the first accounting period is—

(a) the period—

(i) beginning with the date of the appointment as interim trustee, and

(ii) ending on the date 12 months after that on which sequestration is awarded, or

(b) such shorter period as may be determined or agreed in accordance with subsection (5).

(5) This subsection applies where the trustee considers that the funds of the debtor's estate are sufficient to pay a dividend in accordance with section 131(1) in respect of—

(a) in a case where the trustee is AiB, a shorter period of not less than 6 months determined by AiB, and

(b) in any other case, a shorter period of not less than 6 months agreed—

(i) between the trustee and the commissioners, or

(ii) if there are no commissioners, between the trustee and AiB.

(6) An agreement under sub-paragraph (i), or determination under sub-paragraph (ii), of subsection (3)(b)—

(a) may be made in respect of one accounting period or more,

(b) may be made before the beginning of the accounting period in relation to which it has effect and, in any event, is not to have effect unless made before the day on which that accounting period would, but for the agreement or determination, have ended, and

Distribution in accordance with accounting periods

131

(1) The trustee in the sequestration must pay, under section 135(1), a dividend out of the estate in respect of each accounting period—

(a) if the funds of the debtor's estate are sufficient, and

(b) after making allowance for future contingencies.

(2) But subsection (1) is subject to the following subsections.

(3) The trustee may pay—

(a) the debts mentioned in paragraphs (a) to (d) of section 129(1), other than the trustee's own remuneration, at any time,

(b) the preferred debts at any time but only with the consent of the commissioners or, if there are no commissioners, of AiB.

(4) If, in respect of an accounting period, the trustee—

(a) is not ready to pay a dividend, or

(b) considers it would be inappropriate to pay a dividend because the expense of doing so would be disproportionate to the amount of the dividend,

the trustee may, with the consent of the commissioners or, if there are no commissioners, of AiB, postpone the payment to a date not later than the time for payment of a dividend in respect of the next accounting period.

(5) Where a review or appeal is made under section 127 as respects the acceptance or rejection of a creditor's claim, the trustee must, at the time of payment of dividends and until the review or appeal is determined, set aside an amount which would be sufficient, if the determination in the review or appeal were to provide for the creditor's claim being accepted in full, to pay a dividend in respect of that claim.

(6) Subsection (7) applies where a creditor—

(a) has failed to produce evidence in support of the creditor's claim earlier than 8 weeks before the end of an accounting period on being required to do so under section 123(1), and

(b) has given a reason for such failure which is acceptable to the trustee.

(7) The trustee must set aside, for such time as is reasonable to enable the creditor to produce that evidence or any other evidence that will enable the trustee to be satisfied under that section, an amount which would be sufficient, were the claim accepted in full, to pay a dividend in respect of that claim.

(8) Where a creditor submits a claim to the trustee later than 8 weeks before the end of an accounting period but more than 8 weeks before the end of a subsequent accounting period in respect of which, after making allowance for future contingencies, funds are available for the payment of a dividend, the trustee must, if the trustee accepts the claim in whole or in part, pay to the creditor—

(a) the same dividend as has, or dividends as have, already been paid to creditors of the same class in respect of any accounting period or periods, and

(b) whatever dividend may be payable to the creditor in respect of the subsequent accounting period mentioned above.

(9) Paragraph (a) of subsection (8) is without prejudice to any dividend which has already been paid.

(10) In the declaration of, and payment of, a dividend, a payment must not be made more than once by virtue of the same debt.

(11) Any dividend paid in respect of a claim must be paid to the creditor.

Procedure after end of accounting period

Submission of accounts and scheme of division

132

(1) Within 2 weeks after the end of an accounting period the trustee in the sequestration must, in respect of that period, submit to the commissioners (or, if there are no commissioners, to AiB))—

(a) the trustee's accounts of the trustee's intromissions with the estate of the debtor for audit and, where funds are available after making allowance for future contingencies, a scheme of division of the divisible funds, and

(b) a claim for the outlays reasonably incurred by the trustee and for the trustee's remuneration.

(2) Where documents mentioned in subsection (1) are submitted to the commissioners, the trustee must send a copy of them to AiB.

(3) All accounts in respect of legal services incurred by the trustee are, before they are paid by the trustee, to be submitted for taxation to the auditor of the court before which the sequestration is pending.

(4) But subsection (3) is subject to subsection (5).

(5) The trustee may pay the account without submitting it for taxation where—

(a) any such account has been agreed between the trustee and the person entitled to payment in respect of that account,

(b) the trustee is not an associate of that person, and

(c) the commissioners have (or, if there are no commissioners, AiB has) determined that the account need not be submitted for taxation.

(6) This section and sections 133 to 135 do not apply where AiB is the trustee in the sequestration.

Audit of accounts and determination as to outlays and remuneration payable to trustee

133

(1) Within 6 weeks after the end of an accounting period—

(a) the commissioners (or, as the case may be, AiB)—

(i) may audit the accounts, and

(ii) must issue a determination fixing the amount of the outlays and the remuneration payable to the trustee in the sequestration, and

(b) the trustee must make the audited accounts, scheme of division and that determination available for inspection by the debtor and the creditors.

(2) The basis for fixing the amount of the remuneration payable to the trustee may be a commission calculated by reference to the value of the debtor's estate which has been realised by the trustee.

(3) But there is in any event to be taken into account—

(a) the work which, having regard to that value, was reasonably undertaken by the trustee, and

(b) the extent of the trustee's responsibilities in administering the debtor's estate.

(4) In fixing the amount of such remuneration in respect of any accounting period, the commissioners (or, as the case may be, AiB) may take into account any adjustment which the commissioners or AiB may wish to make in the amount of remuneration fixed in respect of any earlier accounting period.

Appeal against determination as to outlays and remuneration payable to trustee

134

(1) Not later than 8 weeks after the end of an accounting period the trustee in the sequestration, the debtor or any creditor may appeal against a determination issued under section 133(1)(a)(ii)—

(a) to AiB where it is a determination of the commissioners, and

(b) to the sheriff where it is a determination of AiB.

(2) But subsection (1) is subject to subsection (4).

(3) The trustee, the debtor or any creditor may, within 14 days beginning with the date of any decision of AiB in an appeal under subsection (1)(a), appeal to the sheriff against that decision.

(4) The debtor may appeal under subsection (1) or (3) if, and only if, the debtor satisfies AiB, or as the case may be the sheriff, that the debtor has, or is likely to have, a pecuniary interest in the outcome of the appeal.

(5) Before the debtor or a creditor appeals under subsection (1) or (3), the debtor or, as the case may be, the creditor must give notice to the trustee of the intention to appeal.

(6) The decision of the sheriff on an appeal under subsection (1)(b) or (3) is final.

Further provision as to procedure after end of accounting period

135

(1) The trustee in the sequestration must pay to the creditors their dividends in accordance with the scheme of division on—

(a) the expiry of the 8 weeks mentioned in section 134(1), or

(b) if there is an appeal under that subsection, on the final determination of the last such appeal.

(2) There must be deposited by the trustee, in an appropriate bank or institution, any dividend—

(a) allocated to a creditor but not cashed or uplifted, or

(b) dependent on a claim in respect of which an amount has been set aside under subsection (5) or (7) of section 131.

(3) If a creditor's claim is revalued, the trustee may—

(a) in paying any dividend to that creditor, make such adjustment to it as the trustee considers necessary to take account of that revaluation, or

(b) require the creditor to repay to the trustee the whole or part of a dividend already paid to the creditor.

Procedure after end of accounting period where Accountant in Bankruptcy is trustee

136

(1) In any case where AiB is the trustee in the sequestration, AiB must at the end of each accounting period—

(a) prepare accounts of AiB's intromissions with the estate of the debtor, and

(b) make a determination of AiB's fees and outlays calculated in accordance with regulations under section 205.

(2) Such accounts and determination must be available for inspection by the debtor and the creditors by not later than 6 weeks after the end of the accounting period to which they relate.

(3) In making a determination as mentioned in subsection (1), AiB may take into account any adjustment which AiB may wish to make in the amount of AiB's remuneration fixed in respect of any earlier accounting period.

(4) Not later than 8 weeks after the end of an accounting period the debtor or any creditor may appeal to the sheriff against AiB's determination.

(5) But subsection (4) is subject to subsection (7).

(6) The decision of the sheriff on an appeal under subsection (4) is final.

(7) The debtor may appeal under subsection (4) if, and only if, the debtor satisfies the sheriff that the debtor has, or is likely to have, a pecuniary interest in the outcome of the appeal.

(8) Before the debtor or a creditor appeals under subsection (4), the debtor or as the case may be the creditor must give notice to AiB of the intention to appeal.

(9) On the expiry of the 8 weeks mentioned in subsection (4), AiB must pay to the creditors their dividends in accordance with the scheme of division.

(10) There must be deposited by AiB, in an appropriate bank or institution, any dividend—

(a) allocated to a creditor but not cashed or uplifted, or

(b) dependent on a claim in respect of which an amount has been set aside under subsection (5) or (7) of section 131.

(11) If a creditor's claim is revalued, AiB may—

(a) in paying any dividend to that creditor, make such adjustment to it as AiB considers necessary to take account of that revaluation, or

(b) require the creditor to repay to AiB the whole or part of a dividend already paid to the creditor.

PART 11 — Discharge

Discharge of debtor

Discharge of debtor where Accountant in Bankruptcy not trustee

137

(1) This section applies where AiB is not the trustee.

(2) AiB may, by granting a certificate of discharge in the prescribed form, discharge the debtor at any time after the date which is 12 months after the date on which sequestration is awarded.

(3) Before deciding whether to discharge the debtor under subsection (2), AiB must—

(a) consider the report provided by the trustee under subsection (4), and

(b) take into account any representations received during the 28 days mentioned in subsection (6)(b).

(4) The trustee must prepare and send a report to AiB—

(a) without delay after the date which is 10 months after the date on which sequestration is awarded, and

(b) if the debtor is not otherwise discharged, before sending to AiB the documentation referred to in section 148(1)(b)(i).

(5) The report must include—

(a) information about—

(i) the debtor's assets, liabilities, financial affairs and business affairs,

(ii) the debtor's conduct in relation to those assets, liabilities and affairs,

(iii) the sequestration, and

(iv) the debtor's conduct in the course of the sequestration,

(b) a statement of whether, in the opinion of the trustee, the debtor has as at the date of the report—

(i) complied with any debtor contribution order,

(ii) co-operated with the trustee in accordance with section 215,

(iii) complied with the statement of undertakings,

(iv) made a full and fair surrender of the debtor's estate,

(v) made a full disclosure of all claims which the debtor is entitled to make against any other persons, and

(vi) delivered to the trustee every document under the debtor's control relating to the debtor's estate, financial affairs or business affairs, and

(c) a statement of whether the trustee has, as at the date that the report is sent to AiB, carried out all of the trustee's functions in accordance with section 50.

(6) The trustee must, at the same time as sending a report to AiB under this section, give to the debtor and to every creditor known to the trustee—

(a) a copy of the report, and

(b) a notice informing the recipient that the recipient has a right to make representations to AiB in relation to the report within 28 days beginning with the day on which the notice is given.

(7) A discharge under this section is not to take effect before the expiry of 14 days beginning with the day of notification of the decision.

Discharge of debtor where Accountant in Bankruptcy trustee

138

(1) This section applies where AiB is the trustee.

(2) AiB may, by granting a certificate of discharge in the prescribed form, discharge the debtor at any time after the date which is 12 months after the date on which sequestration is awarded.

(3) AiB must, as soon as practicable after the date which is 12 months after the date on which sequestration is awarded—

(a) decide whether to discharge the debtor under subsection (2),

(b) notify the debtor and every creditor known to AiB of that decision, and

(4) The report must give an account of—

(a) the debtor's assets, liabilities, financial affairs and business affairs,

(b) the debtor's conduct in relation to those assets, liabilities and affairs,

(d) the debtor's conduct in the course of the sequestration, including compliance with the statement of undertakings.

(5) Subsection (6) applies where—

(a) AiB refuses to discharge the debtor under subsection (2), and

(b) the debtor is not otherwise discharged.

(6) AiB must, as soon as practicable after the date which is 12 months after the date of the refusal—

(a) decide whether to discharge or refuse to discharge the debtor under subsection (2),

(b) notify the debtor and every creditor known to AiB of that decision, and

(7) Discharge under this section is not to take effect before the expiry of 14 days beginning with the day of notification of the decision to discharge.

Discharge of debtor: review and appeal

139

(1) The trustee or the debtor may apply to AiB for a review of a decision to refuse to discharge the debtor under section 137(2) or 138(2).

(2) Any creditor may apply to AiB for a review of a decision to discharge the debtor under section 137(2) or 138(2).

(3) Any application under subsection (1) or (2) must be made within 14 days beginning with the day of the notification of the decision in question.

(4) If an application is made under subsection (2), the discharge is suspended until the determination of the review by AiB.

(5) If an application is made under subsection (1) or (2), AiB must—

(a) take into account any representations made by an interested person within 21 days beginning with the day on which the application is made, and

(b) confirm or revoke the decision within 28 days beginning with that day.

(6) The debtor, the trustee or any creditor may appeal to the sheriff, against any decision of AiB under subsection (5)(b), within 14 days beginning with the day of the decision.

Discharge of debtor to whom section 2(2) applies

140

(1) Where section 2(2) applies to a debtor, the debtor is discharged on the date which is 6 months after the date on which sequestration is awarded.

(2) A debtor may, following discharge, apply to AiB for a certificate of discharge in the prescribed form.

Deferral of discharge where debtor cannot be traced

141

(1) Subsection (2) applies where the trustee—

(a) having made reasonable inquiries, is unable to ascertain the whereabouts of the debtor, and

(b) as a result is unable to carry out the trustee's functions in accordance with section 50.

(2) The trustee must—

(a) notify the debtor by sending to the last known address of the debtor a deferral notice in the prescribed form,

(b) give a deferral notice to every creditor known to the trustee, and

(3) Any deferral application under subsection (2)(c) must be made by the trustee—

(a) no earlier than the date which is 8 months after the date on which sequestration is awarded, and

(b) no later than the date which is 10 months after the date on which sequestration is awarded.

(4) After receiving a deferral application, AiB must—

(a) take into account any representations made by an interested person within 14 days beginning with the day on which the application is made, and

(b) if satisfied of the matters mentioned in subsection (5), issue a certificate deferring discharge indefinitely.

(5) The matters are—

(a) that the trustee is unable to ascertain the whereabouts of the debtor, and

(b) it would not be reasonably practicable for the trustee to continue to search for the debtor.

(6) Where AiB is the trustee and has given a deferral notice in accordance with subsection (2)(b), AiB must—

(a) take into account any representations made by an interested person within 14 days beginning with the day on which the deferral notice is given, and

(b) if satisfied that it would not be reasonably practicable to continue to search for the debtor, issue a certificate deferring discharge indefinitely.

(7) Where a certificate is issued under subsection (4)(b) or (6)(b), AiB must make an appropriate entry in the register of insolvencies.

Debtor not traced: new trustee

142

(1) This section applies where a certificate is issued under section 141(4)(b).

(2) The trustee may apply to AiB, in the prescribed form, for authority to resign office.

(3) An application under subsection (2) must include details of every creditor known to the trustee.

(4) An application under subsection (2) may not be made—

(a) if, after the certificate is issued, the trustee ascertains the whereabouts of the debtor or the debtor makes contact with the trustee, or

(b) after the date which is 6 months after that on which the certificate is issued.

(5) Where an application is made under subsection (2), AiB must issue to the trustee who made the application a notice in the prescribed form granting the application.

(6) Where a notice is issued under subsection (5)—

(a) AiB is deemed to be the trustee,

(b) AiB must notify every creditor known to AiB that AiB is deemed to be the trustee,

(c) the former trustee is not entitled to recover, other than by a claim in the final distribution of the debtor's estate, outlays and remuneration payable under sections 132 and 133 (there being no effect on any outlays and remuneration paid to the former trustee before the issue of the notice), and

(d) subsections (9) to (13) of section 69 apply in relation to the appointment of AiB as the new trustee as they apply in relation to the appointment of a new trustee under that section.

Debtor not traced: subsequent debtor contact

143

(1) This section applies where—

(a) a certificate is issued under section 141(4)(b) or (6)(b), and

(b) the trustee ascertains the whereabouts of the debtor or the debtor makes contact with the trustee.

(2) Where AiB is the trustee, AiB may discharge the debtor at any time after the date which is 12 months after that on which—

(a) the whereabouts of the debtor were ascertained, or

(b) the debtor made contact with the trustee.

(3) Where AiB is not the trustee, the trustee must prepare and send a report to AiB without delay after the date which is 10 months after the earlier of—

(a) the date on which the whereabouts of the debtor were ascertained by the trustee, and

(b) the date on which the debtor made contact with the trustee.

(4) If the trustee sends a report to AiB under subsection (3)—

(a) the report must include the matters which, in a report sent to AiB, are included in accordance with subsection (5) of section 137, and

(b) subsection (6) of that section applies to a report sent under this section as it applies to a report sent in accordance with subsection (4) of that section.

(5) After receiving a report under subsection (3), AiB may discharge the debtor by granting a certificate of discharge in the prescribed form.

(6) Before deciding whether to discharge the debtor under subsection (5), AiB must—

(a) consider the report prepared under subsection (3), and

(b) take into account any representations received during the 28 days mentioned in subsection (6)(b) of section 137 (as applied in accordance with subsection (4)).

(7) Discharge under subsection (2) or (5) is not to take effect before the expiry of 14 days beginning with the day of notification of the decision to discharge.

(8) Discharge under subsection (2) or (5) is deemed for the purposes of section 145 to have been given under section 137(2).

Subsequent debtor contact: review and appeal

144

(1) The debtor may apply to AiB for a review of a decision under section 143(2) or (5) to refuse to discharge the debtor.

(2) Any creditor may apply to AiB for a review of a decision under section 143(2) or (5) to discharge the debtor.

(3) Any application under subsection (1) or (2) must be made within 14 days beginning with the day of notification of the decision in question.

(4) If an application for a review under subsection (2) is made, the discharge is suspended until the determination of that review by AiB.

(5) If an application for a review under subsection (1) or (2) is made, AiB must—

(a) take into account any representations made by an interested person within 21 days beginning with the day on which the application is made, and

(b) confirm or revoke the decision within 28 days beginning with the day on which the application is made.

(6) The debtor, the trustee or any creditor may appeal to the sheriff against any decision of AiB under subsection (5)(b) within 14 days beginning with the day of the decision.

Effect of discharge under section 137, 138 or 140

145

(1) On the discharge of the debtor under section 137, 138 or 140 the debtor is discharged of all debts and obligations contracted by the debtor, or for which the debtor was liable, at the date of sequestration.

(2) Subsection (1) is subject to subsections (3) and (5).

(3) The debtor is not discharged by virtue of subsection (1) from—

(a) any liability to pay a fine or other penalty due to the Crown,

(b) any liability to pay a fine imposed in a justice of the peace court (or a district court),

(c) any liability under a compensation order (within the meaning of section 249 of the Criminal Procedure (Scotland) Act 1995,

(d) any liability to forfeiture of a sum of money deposited in court under section 24(6) of the Criminal Procedure (Scotland) Act 1995,

(e) any liability incurred by reason of fraud or breach of trust,

(f) any obligation to pay—

(i) aliment, or any sum of an alimentary nature, under any enactment or rule of law, or

(ii) any periodical allowance payable on divorce by virtue of a court order or under an obligation, or

(g) the obligation imposed on the debtor by section 215.

(4) The obligations mentioned in paragraph (f) of subsection (3) do not include—

(a) aliment, or a periodical allowance, which could be included in the amount of a creditor's claim under paragraph 2 of schedule 2, or

(b) child support maintenance within the meaning of the Child Support Act 1991 which was unpaid in respect of any period before the date of sequestration of—

(i) any person by whom it was due to be paid, or

(ii) any employer by whom it was, or was due to be, deducted under section 31(5) of that Act.

(5) The discharge of the debtor under section 137, 138 or 140 does not affect any right of a secured creditor for an obligation in respect of which the debtor has been discharged, to enforce the security in respect of that obligation.

(6) In subsection (3)(a), the reference to a fine or other penalty due to the Crown includes a reference to a confiscation order made under Part 2, 3 or 4 of the Proceeds of Crime Act 2002.

(7) Nothing in this section affects regulations in relation to which section 73B of the Education (Scotland) Act 1980 (regulations relating to student loans) applies.

Discharge under section 140: conditions

146

(1) This section applies where a debtor is discharged under section 140.

(2) During the relevant period the debtor must comply with the condition in subsection (3) before the debtor, either alone or jointly with another person, obtains credit—

(a) to the extent of £2,000 (or such other sum as may be prescribed) or more, or

(b) of any amount where, at the time of obtaining credit, the debtor has debts amounting to £1,000 (or such other sum as may be prescribed) or more.

(3) The condition is that the debtor must inform the person who is providing credit to the debtor (or, as the case may be, jointly to the debtor and another person) that the debtor is required to comply with the conditions in this section.

(4) During the relevant period, the debtor must not engage (whether directly or indirectly) in a business under a name other than that to which the discharge relates unless the debtor complies with the condition in subsection (5).

(5) The condition is that the debtor must inform any person with whom the debtor enters into any business transaction of the name of the business to which the discharge relates.

(6) In this section, “relevant period” means the 6 months beginning with the date of discharge.

Section 146: sanctions

147

(1) If a debtor fails to comply with the requirement imposed by subsection (2) or (4) of section 146, that section applies in relation to the debtor as if the relevant period were the 12 months beginning with the date of discharge.

(2) If a debtor fails to comply with the requirement imposed by subsection (2) or (4) of section 146 during the period when the section applies in relation to the debtor by virtue of subsection (1), the debtor commits an offence.

(3) A debtor who commits an offence under subsection (2) is liable on summary conviction—

(a) to a fine not exceeding the statutory maximum,

(b) to imprisonment for—

(i) a term not exceeding 3 months, or

(ii) if the person has previously been convicted of an offence inferring dishonest appropriation of property (or an attempt at such appropriation), a term not exceeding 6 months, or

(4) A debtor who commits an offence under subsection (2) is liable on conviction on indictment—

(a) to a fine,

(b) to imprisonment for a term not exceeding 2 years, or

Discharge of trustee

148

(1) After the trustee in the sequestration has made a final division of the debtor's estate and has inserted the trustee's final audited accounts in the sederunt book, the trustee—

(a) must pay to AiB any unclaimed dividends and unapplied balances,

(b) on that being done—

(i) must send to AiB the sederunt book (in the format specified by subsection (2)) and a copy of the audited accounts, and

(ii) may at the same time apply to AiB for a certificate of discharge.

(2) The trustee must send an electronic version of the sederunt book in such format as AiB may from time to time direct.

(3) AiB must deposit any unclaimed dividends and any unapplied balances paid to AiB under subsection (1)(a) in an appropriate bank or institution.

(4) The trustee must send, to the debtor and to all the creditors known to the trustee, notice of any application under subsection (1)(b)(ii) and must inform the debtor and such creditors—

(a) that written representations relating to the application may be made by them to AiB within 14 days after the notification,

(b) that the sederunt book is available for inspection following a request made to AiB and contains the audited accounts of, and scheme of division in, the sequestration, and

(5) On the expiry of the 14 days mentioned in subsection (4)(a), AiB, after examining the documents sent to AiB and considering any representations duly made to AiB, must—

(a) grant or refuse to grant the certificate of discharge, and

(b) notify accordingly—

(i) the trustee,

(ii) the debtor, and

(iii) all creditors who made such representations.

(6) Any certificate of discharge granted under subsection (5)—

(a) must take effect after the expiry of the 14 days mentioned in section 149(2), and

(b) has no effect if an application for review is made under section 149(1).

(7) The grant of a certificate of discharge under this section has the effect of discharging the trustee from all liability (other than any liability arising from fraud)—

(a) to the debtor, or

(b) to the creditors,

in respect of any act or omission of the trustee in exercising the functions conferred on the trustee by this Act (including, where the trustee was also the interim trustee, the functions of interim trustee).

(8) This section and section 149 do not apply in any case where AiB is trustee.

Further provision as regards discharge of trustee

149

(1) The trustee, the debtor or any creditor who has made representations under subsection (4)(a) of section 148 may apply to AiB for a review of a determination under subsection (5) of that section.

(2) Any application under subsection (1) must be made within 14 days beginning with the day of the determination.

(3) If an application for a review under subsection (1) is made, AiB must—

(a) take into account any representations made, within 21 days beginning with the day on which the application is made, by an interested person, and

(b) confirm, amend or revoke the determination (whether or not issuing a new certificate of discharge) within 28 days beginning with that day.

(4) Within 14 days after a decision under subsection (3)(b)—

(a) the trustee,

(b) the debtor, or

may appeal against the decision to the sheriff.

(5) If, on an appeal under subsection (4), the sheriff determines that a certificate of discharge which has been refused should be granted the sheriff must order AiB to grant it.

(6) The sheriff clerk must send AiB a copy of the sheriff's decree.

(7) The decision of the sheriff on an appeal under subsection (4) is final.

(8) Where a certificate of discharge is granted under section 148 or by virtue of this section, AiB must make an appropriate entry in—

(a) the register of insolvencies, and

(b) in the sederunt book.

(9) The provisions of this section apply (subject to any necessary modifications)—

(a) where a trustee has died, to the trustee's executor, or

(b) where a trustee has resigned office or been removed from office, to that trustee,

as they apply to a trustee who has made a final division of the debtor's estate in accordance with the preceding provisions of this Act.

Unclaimed dividends

150

(1) Any person producing evidence of that person's right may apply to AiB to receive a dividend deposited under section 148(3) or 151(2), if the application is made not later than 7 years after the date of deposit.

(2) If AiB is satisfied of that person's right to the dividend, AiB must authorise the bank or institution in which the deposit was made to pay to the person the amount of the dividend and of any interest which has accrued on the dividend.

(3) AiB is, at the expiry of 7 years from the date of deposit of any unclaimed dividend or unapplied balance under section 148(3) or 151(2), to hand over the deposit receipt or other voucher relating to the dividend or balance to the Scottish Ministers who on that being done are entitled to payment of the amount due (principal and interest) from the bank or institution in which the deposit was made.

Discharge of Accountant in Bankruptcy

151

(1) This section applies where AiB has acted as the trustee in the sequestration.

(2) AiB must deposit any unclaimed dividends and any unapplied balances in an appropriate bank or institution.

(3) AiB must send to the debtor and to all creditors known to AiB—

(a) a determination of AiB's fees and outlays calculated in accordance with regulations under section 205,

(b) a notice in writing stating—

(i) that AiB has commenced the procedure under this Act leading to discharge in respect of AiB's actings as trustee,

(ii) that the sederunt book relating to the sequestration is available for inspection following a request made to AiB,

(iii) that an application for review may be made under subsection (4),

(iv) that an appeal may be made to the sheriff under subsection (7), and

(v) the effect of subsections (9) and (10).

(4) The debtor or any creditor may apply to AiB for review of the discharge of AiB in respect of AiB's actings as trustee.

(5) Any application under subsection (4) must be made within 14 days beginning with the day on which notice is sent under subsection (3)(b).

(6) If an application under subsection (4) is made, AiB must—

(a) take into account any representations made by an interested person within 21 days beginning with the day on which the application is made, and

(b) confirm or revoke the discharge within 28 days beginning with that day.

(7) The debtor or any creditor may, within 14 days beginning with the day on which a decision is made by AiB under subsection (6)(b), appeal to the sheriff against that decision.

(8) The decision of the sheriff on an appeal under subsection (7) is final.

(9) Subsection (10) applies where—

(a) the requirements of this section have been complied with, and

(b) no appeal is made under subsection (7) or such an appeal is made but is refused as regards the discharge of AiB.

(10) AiB is discharged from all liability (other than any liability arising from fraud)—

(a) to the debtor, or

(b) to the creditors,

in respect of any act or omission of AiB in exercising the functions of trustee in the sequestration (including, where the trustee was also the interim trustee, the functions of interim trustee).

PART 12 — Assets discovered after discharge of trustee

Assets discovered after discharge of trustee: appointment of trustee

152

(1) This section applies where—

(a) the trustee is discharged—

(i) under section 148,

(ii) by virtue of section 149, or

(iii) under section 151, and

(b) after that discharge but within 5 years beginning with the date on which sequestration is awarded, the trustee or AiB becomes aware of any newly identified estate with a value of not less than £1,000 (or such other sum as may be prescribed).

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