Bankruptcy (Scotland) Act 1985 (repealed)

32 Vesting of estate, and dealings of debtor, after sequestration. S

(1) Subject to subsection (2) below, any income of whatever nature received by the debtor on a relevant date, other than income arising from the estate which is vested in the permanent trustee, shall vest in the debtor.

(2) [F1 Notwithstanding anything in section 11 or 12 of the Welfare Reform and Pensions Act 1999,]The sheriff, on the application of the permanent trustee, may, after having regard to all the circumstances, determine a suitable amount to allow for—

(a) aliment for the debtor; and

(b) the debtor’s relevant obligations;

and if the debtor’s income is in excess of the total amount so allowed the sheriff shall fix the amount of the excess and order it to be paid to the permanent trustee.

[F2 (2A) The amount allowed for the purposes specified in paragraphs (a) and (b) of subsection (2) above shall not be less than the total amount of any income received by the debtor—

(a) by way of guaranteed minimum pension; and

(b) in respect of his protected rights as a member of a pension scheme, “guaranteed minimum pension” and “protected rights” having the same meanings as in the Pension Schemes Act 1993.]

(3) The debtor’s relevant obligations referred to in paragraph (b) of subsection (2) above are—

(a) any obligation of aliment owed by him (“obligation of aliment” having the same meaning as in the M1 Family Law (Scotland) Act 1985);

(b) any obligation of his to make a periodical allowance to a former spouse [F3 or former civil partner] ;

[F4 (c) any obligation of his to pay child support maintenance under the Child Support Act 1991,]

but any amount allowed under that subsection for the relevant obligations [F5 referred to in paragraphs (a) and (b) above] need not be sufficient for compliance with a subsisting order or agreement as regards such aliment or periodical allowance.

(4) In the event of any change in the debtor’s circumstances, the sheriff, on the application of the permanent trustee, the debtor or any other interested person, may vary or recall any order under subsection (2) above.

(5) Diligence [F6 (which, for the purposes of this section, includes the making of a deduction from earnings order under the Child Support Act 1991)]in respect of a debt or obligation of which the debtor would be discharged under section 55 of this Act were he discharged under section 54 thereof shall not be competent against income vesting in him under subsection (1) above.

(6) Without prejudice to subsection (1) above, any estate, wherever situated, which—

(a) is acquired by the debtor on a relevant date; and

(b) would have vested in the permanent trustee if it had been part of the debtor’s estate on the date of sequestration,

shall vest in the permanent trustee for the benefit of the creditors as at the date of acquisition; and any person who holds any such estate shall, on production to him of a copy of the act and warrant certified by the sheriff clerk confirming the permanent trustee’s appointment, convey or deliver the estate to the permanent trustee:

Provided that—

(i)

if such a person has in good faith and without knowledge of the sequestration conveyed the estate to the debtor or to anyone on the instructions of the debtor, he shall incur no liability to the permanent trustee except to account for any proceeds of the conveyance which are in his hands; and

(ii)

this subsection shall be without prejudice to any right or interest acquired in the estate in good faith and for value.

(7) The debtor shall immediately notify the permanent trustee of any assets acquired by him on a relevant date or of any other substantial change in his financial circumstances; and, if the debtor fails to comply with this subsection, 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.

(8) Subject to subsection (9) below, any dealing of or with the debtor relating to his estate vested in the permanent trustee under section 31 of this Act shall be of no effect in a question with the permanent trustee.

(9) Subsection (8) above shall not apply where the person seeking to uphold the dealing establishes—

(a) that the permanent trustee—

(i) has abandoned to the debtor the property to which the dealing relates;

(ii) has expressly or impliedly authorised the dealing; or

(iii) is otherwise personally barred from challenging the dealing, or

(b) that the dealing is—

(i) the performance of an obligation undertaken before the date of sequestration by a person obliged to the debtor in the obligation;

(ii) the purchase from the debtor of goods for which the purchaser has given value to the debtor or is willing to give value to the permanent trustee; or

(iii) a banking transaction in the ordinary course of business between the banker and the debtor,

and that the person dealing with the debtor was, at the time when the dealing occurred, unaware of the sequestration and had at that time no reason to believe that the debtor’s estate had been sequestrated or was the subject of sequestration proceedings.

(10) In this section “a relevant date” means a date after the date of sequestration and before the date on which the debtor’s discharge becomes effective.

Textual Amendments

F1 Words in s. 32(2) inserted (29.5.2000) by 1999 c. 30, s. 18, Sch. 2 para. 1; S.I. 2000/1382, art. 2(c)(e)

F2 S. 32(2A) inserted (6.4.1997) by 1995 c. 26, s. 122, Sch. 3 para. 14; S.I. 1997/664, art. 2(3), Sch. Pt. II

F3 Words in s. 32(3)(b) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(2), 263, Sch. 28 para. 34; S.S.I. 2005/604, art. 2(c)

F4 S. 32(3)(c) inserted (4.4.1993) by Child Support Act 1991 (c. 48, SIF 20), s. 58(13), Sch. 5 para. 6(2)(a)(i) (with s. 9(2)); S.I. 1992/2644, art. 2.

F5 Words in s. 32(3) inserted (4.4.1993) by Child Support Act 1991 (c. 48, SIF 20), s. 58(13), Sch. 5 para. 6(2)(a)(ii) (with s. 9(2)); S.I. 1992/2644, art. 2.

F6 Words in s. 32(5) inserted (4.4.1993) by Child Support Act 1991 (c. 48, SIF 20), s. 58(13), Sch. 5 para. 6(2)(b) (with s. 9(2)); S.I. 1992/2644, art. 2.

Modifications etc. (not altering text)

C1 S. 32(2) amended by Education (Student Loans) Act 1990 (c. 6, SIF 41:1, 2), s. 1(5), Sch. 2 para. 6(a)

S. 32(2) restricted (12.8.1998) by 1998/2003, art. 13(2)(a)

S. 32(2) restricted (7.7.2000) by S.S.I. 2000/200, art. 16

C2 S. 32(6) amended by Education (Student Loans) Act 1990 (c. 6, SIF 41:1, 2), s. 1(5), Sch. 2 para. 6(b)

C3 S. 32(8) excluded (25.4.1991) by Companies Act 1989 (c. 40, SIF 27), ss. 154, 155, 164(3), 175(4); S.I. 1991/878, art. 2, Sch.

C4 S. 32(8) excluded (11.12.1999) by S.I. 1999/2979, reg. 16(3)

S. 32(8) excluded (11.12.1999) by S.I. 1999/2979, reg. 19(3)

Marginal Citations

M1 1985 c. 37.