Bankruptcy (Scotland) Act 1985 (repealed)

Protected trust deeds S

5 Paragraphs 6 and 7 of this Schedule shall apply in respect of a trust deed if—

(a) the trustee is a person who would not be disqualified under section 24(2) of this Act from acting as permanent trustee if the debtor’s estate were being sequestrated;

(b) the trustee, forthwith after the trust deed has been delivered to him, both publishes in the Edinburgh Gazette and sends to every creditor known to him a notice in the prescribed form—

(i) stating that the trust deed has been granted by the debtor; and

(ii) inviting creditors, in order that paragraphs 6 and 7 of this Schedule may apply, to accede to the trust deed within 4 weeks of the date on which the notice is so published;

(c) within the said period of 4 weeks a majority in number and not less than two-thirds in value of the creditors accede to the trust deed; and

(d) the trustee immediately after the expiry of the said period sends to the Accountant in Bankruptcy for registration in the register of insolvencies a copy of the trust deed with a certificate endorsed thereon that it is a true copy and the accession of creditors as required by sub-paragraph (c) above has been obtained.

6 Where the provisions of paragraph 5 of this Schedule have been fulfilled, then—

(a) subject to paragraph 7 of this Schedule, a creditor who has not acceded to the trust deed shall have no higher right to recover his debt than a creditor who has so acceded; and

(b) the debtor may not petition for the sequestration of his estate while the trust deed subsists.

7 (1) A qualified creditor who has not acceded to the trust deed may present a petition for sequestration of the debtor’s estate—

(a) not later than 6 weeks after the date of publication of the notice under paragraph 5(b) of this Schedule; but

(b) subject to section 8(1)(b) of this Act, at any time if he avers that the provision for distribution of the estate is or is likely to be unduly prejudicial to a creditor or class of creditors.

(2) The court may award sequestration in pursuance of sub-paragraph (1)(a) above if it considers that to do so would be in the best interests of the creditors.

(3) The court shall award sequestration in pursuance of sub-paragraph (1)(b) above if, but only if, it is satisfied that the creditor’s said averment is correct.

F1 8 S In this Act a trust deed in respect of which paragraphs 6 and 7 of this Schedule apply is referred to as a “protected trust deed”.

Textual Amendments

F1 Sch. 5 para. 5 substituted (19.2.2008) for Sch. 5 paras. 5-13 by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 20(1), 227(3) (with s. 223); S.S.I. 2008/45, art. 2 (with art. 3)

F2 9 S Where the trustee under a protected trust deed has made the final distribution of the estate among the creditors, he shall, not more than 28 days after the final distribution, send to the Accountant in Bankruptcy for registration in the register of insolvencies—

(a) a statement in the prescribed form indicating how the estate was realised and distributed; and

(b) a certificate to the effect that the distribution was in accordance with the trust deed.

Textual Amendments

F2 Sch. 5 para. 5 substituted (19.2.2008) for Sch. 5 paras. 5-13 by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 20(1), 227(3) (with s. 223); S.S.I. 2008/45, art. 2 (with art. 3)

10 Where the trustee under a protected trust deed has obtained a discharge from the creditors who have acceded to the trust deed he shall forthwith give notice of the discharge—

(a) by sending the notice by recorded delivery to every creditor known to him who has not acceded to the trust deed; and

(b) by sending the notice to the Accountant in Bankruptcy who shall register the fact of the discharge in the register of insolvencies,

and, except where the court makes an order under paragraph 12 below, the sending of such notice to a creditor who has not acceded to the trust deed shall be effective to make the discharge binding upon that creditor.