Bankruptcy (Scotland) Act 1985 (repealed)

5 Sequestration of the estate of living or deceased debtor. S

(1) The estate of a debtor may be sequestrated in accordance with the provisions of this Act.

[F1 (2) The sequestration of the estate of a living debtor shall be on the petition of—

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

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

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

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

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

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

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

(c) the debtor either—

(i) is apparently insolvent; or

(ii) has granted a trust deed and the trustee has complied with the requirements of sub-sub-paragraphs (a) to (c) of paragraph 5(1) of Schedule 5 to this Act but has received notification as mentioned in sub-sub-paragraph (d) of that paragraph,

and for the purposes of this paragraph a debtor shall not be apparently insolvent by reason only that he has granted a trust deed or that he has given notice to his creditors as mentioned in paragraph (b) of section 7(1) of this Act.

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

(a) that the debtor has failed to comply—

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

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

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

(3) The sequestration of the estate of a deceased debtor shall be on the petition of—

(a) an executor or a person entitled to be appointed as executor on the estate;

(b) a qualified creditor or qualified creditors of the deceased debtor; or

(c) the trustee acting under a trust deed.

(4) In this Act “qualified creditor” means a creditor who, at the date of the presentation of the petition, is a creditor of the debtor in respect of liquid or illiquid debts (other than contingent or future debts [F2 or amounts payable under a confiscation order]), whether secured or unsecured, which amount (or of one such debt which amounts) to not less than [F3 £1,500] or such sum as may be prescribed; and “qualified creditors” means creditors who at the said date are creditors of the debtor in respect of such debts as aforesaid amounting in aggregate to not less than [F3 £1,500] or such sum as may be prescribed [F4 ; and in the foregoing provisions of this subsection “confiscation order” has the meaning assigned F5 . . . [F6 , by section 71(9)(a) of the Criminal Justice Act 1988] or by [F7 section 2(9) of the Drug Trafficking Act 1994][F8 or by section 49(1) of the Proceeds of Crime (Scotland) Act 1995]].

[F9 (4A) In this Act, “trust deed” means a voluntary trust deed granted by or on behalf of the debtor whereby his estate (other than such of his estate as would not, under section 33(1) of this Act, vest in the permanent trustee if his estate were sequestrated) is conveyed to the trustee for the benefit of his creditors generally.]

(5) Paragraphs 1(1) and (3), 2(1)(a) and (2) and 6 of Schedule 1 to this Act shall apply in order to ascertain the amount of the debt or debts for the purposes of subsection (4) above as they apply in order to ascertain the amount which a creditor is entitled to claim, but as if for any reference to the date of sequestration there were substituted a reference to the date of presentation of the petition.

(6) The petitioner shall [F10 , on the day the petition for sequestration is presented under this section, send a copy of the petition] to the Accountant in Bankruptcy.

[F11 (6A) Where the petitioner is the debtor—

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

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

(7) Where, after a petition for sequestration has been presented but before the sequestration has been awarded, the debtor dies then—

(a) if the petitioner was the debtor, the petition shall fall;

(b) if the petitioner is a creditor, the proceedings shall continue in accordance with this Act so far as circumstances will permit.

(8) Where, after a petition for sequestration has been presented under this section but before the sequestration has been awarded, a creditor who—

(a) is the petitioner or concurs in a petition by the debtor; or

(b) has lodged answers to the petition,

withdraws or dies, there may be sisted in the place of—

(i) the creditor mentioned in paragraph (a) above, any creditor who was a qualified creditor at the date when the petition was presented and who remains so qualified at the date of the sist;

(ii) the creditor mentioned in paragraph (b) above, any other creditor.

[F12 (9) If the debtor—

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

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

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

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

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

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

(b) failing to disclose a material fact; or

(c) making a material misstatement.]

Textual Amendments

F1 S. 5(2)(2A)-(2C) substituted for s. 5(2) (1.4.1993, subject to savings in arts. 4,5 of S.I. 1993/438) by 1993 c. 6, s. 3(2) (with s. 12(6)); S.I. 1993/438, art. 3

F2 Words inserted by Criminal Justice (Scotland) Act 1987 (c.41, SIF 39:1), ss. 45(5)(a)(i), 47(4)(a)

F3 Words in s. 5(4) substituted (1.4.1993, subject to savings in arts. 4, 5 of S.I. 1993/438) by 1993 c. 6, s. 3(3) (with s. 12(6)); S.I. 1993/438, art. 3

F4 Words added by Criminal Justice (Scotland) Act 1987 (c. 41, 39:1), ss. 45(5)(ii), 47(4)(a)

F5 Words in s. 5(4) repealed (1.4.1996) by 1995 c. 40, ss. 6(1), 7(2), Sch. 5 (with Sch. 3 paras. 1, 3)

F6 Words added by Criminal Justice Act 1988 (c. 33, SIF 39:1), ss. 123, 170, Sch. 8 para. 16, Sch. 15 para. 107

F7 Words in s. 5(4) substituted (3.2.1995) by 1994 c. 37, ss. 65(1), 69(2), Sch. 1 para. 10(1)

F8 S. 5(4): by 1995 c. 40, ss. 5, 7(2), Sch. 4 para. 58(2) it is provided (1.4.1996) that for the words “or by section 114(1) of the Criminal Justice (Scotland) Act 1995” there shall be substituted the words “or by section 49(1) of the Proceeds of Crime (Scotland) ACt 1995”

F9 S. 5(4A) inserted (1.4.1993, subject to savings in arts. 4, 5 of S.I. 1993/438) by 1993 c. 6, s. 3(4) (with s. 12(6)); S.I. 1993/438, art. 3

F10 Words in s. 5(6) substituted (1.4.1993, subject to savings in arts. 4, 5 of S.I. 1993/438) by 1993 c. 6, s. 3(5) (with s. 12(6)); S.I. 1993/438, art. 3

F11 S. 5(6A) inserted (1.4.1993, subject to savings in arts. 4, 5 of S.I. 1993/438) by 1993 c. 6, s. 3(6) (with s. 12(6)); S.I. 1993/438, art. 3

F12 S. 5(9)(10) inserted (1.4.1993, subject to savings in arts. 4, 5 of S.I. 1993/438) by 1993 c. 6, s. 3(7) (with s. 12(6)); S.I. 1993/438, art. 3

Modifications etc. (not altering text)

C1 S. 5 amended (20.7.2001 for certain purposes and otherwise 1.12.2001) by 2000 c. 8, s. 372(1)(b); S.I. 2001/2632, art. 2, Sch. Pt. I; S.I. 2001/3538, art. 2(1)