Moveable Transactions (Scotland) Act 2023

Prospective

4 Assignation of claims: insolvency S

(1) This section applies where—

(a) an assignation document is granted in respect of a claim such as is mentioned in section 1(4), and

(b) after the document is granted, the assignor becomes insolvent.

(2) The assignation is ineffective in relation to the claim if the assignor becomes the holder of the claim after becoming insolvent.

(3) But subsection (2) does not apply in relation to a claim in respect of income from property in so far as that claim—

(a) is not attributable to anything agreed to by, or done by, the assignor after the assignor became insolvent, and

(b) relates to the use of property in existence at the time the assignor became insolvent.

(4) Subsection (5) applies where—

(a) but for subsection (3), the assignation would be ineffective by virtue of subsection (2), and

(b) the assignor is discharged—

(i) under section 137, 138 or 140 of the Bankruptcy (Scotland) Act 2016, or

(ii) by virtue of section 184(3) of that Act.

(5) The assignation is ineffective, in relation to the claim, if by the time of discharge the assignor has not become the holder of the claim.

(6) For the purposes of this section—

(a) an assignor who is an individual, or the estate of which may be sequestrated by virtue of section 6 of the Bankruptcy (Scotland) Act 2016, becomes insolvent when—

(i) the assignor’s estate is sequestrated,

(ii) the assignor grants a trust deed for creditors or makes a composition or arrangement with creditors,

(iii) the assignor is adjudged bankrupt,

(iv) a voluntary arrangement proposed by the assignor is approved,

(v) the assignor’s application for a debt payment programme is approved under section 2 of the Debt Arrangement and Attachment (Scotland) Act 2002, or

(vi) the assignor becomes subject to any other order or arrangement analogous to any of those mentioned in sub-paragraphs (i) to (v) anywhere in the world, and

(b) an assignor other than is mentioned in paragraph (a) becomes insolvent when—

(i) a decision approving a voluntary arrangement entered into by the assignor has effect under section 4A of the Insolvency Act 1986 (the “1986 Act”),

(ii) the assignor is wound up under Part 4 or 5 of the 1986 Act or under section 367 of the Financial Services and Markets Act 2000,

(iii) an administrative receiver, as defined in section 251 of the 1986 Act, is appointed over all or part (being a part which includes the claim) of the property of the assignor,

(iv) the assignor enters administration (“enters administration” being construed in accordance with paragraph 1(2) of schedule B1 of the 1986 Act),

(v) an order under section 901F of the Companies Act 2006 sanctioning a compromise or arrangement entered into by the assignor comes into effect over all or part of the property of the assignor, or

(vi) the assignor becomes subject to any other order, appointment or arrangement analogous to any of those mentioned in sub-paragraphs (i) to (v) anywhere in the world.

(7) The Scottish Ministers may by regulations modify—

(a) subsection (4),

(b) subsection (5),

(c) subsection (6).

Commencement Information

I1 S. 4 not in force at Royal Assent, see s. 121(2)