Bankruptcy (Scotland) Act 1985 (repealed)

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

(1) Subject to [F1 subsections (2) and (4B)] 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 F2 . . . trustee, shall vest in the debtor.

(2) [F3 Notwithstanding anything in section 11 or 12 of the Welfare Reform and Pensions Act 1999,] the sheriff, on the application of the F2 . . . 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 F2 . . . trustee.

[F4 (2WA) Subject to subsection (4L) below, no application may be made under subsection (2) above after the date on which the debtor's discharge becomes effective.

(2XA) An order made by the sheriff under subsection (2) above shall specify the period during which it has effect and that period—

(a) may end after the date on which the debtor's discharge becomes effective; and

(b) shall end no later than 3 years after the date on which the order is made.

(2YA) An order made by the sheriff under subsection (2) above may provide that a third person is to pay to the trustee a specified proportion of money due to the debtor by way of income.

(2ZA) If the debtor fails to comply with an order made under subsection (2) above, 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.]

[F5 (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; F6 . . .

(b) F6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“guaranteed minimum pension” [F7 having the same meaning] 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 [F8 or former civil partner] ;

F9 [(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 [F10 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 F2 . . . trustee, the debtor or any other interested person, may vary or recall any order under subsection (2) above.

[F11 (4A) The sheriff clerk shall send a copy of any order made under subsection (2) above (and a copy of any variation or recall of such an order) to the Accountant in Bankruptcy.

(4B) Where no order has been made under subsection (2) above, a debtor may enter into an agreement in writing with the trustee which provides—

(a) that the debtor is to pay to the trustee an amount equal to a specified part or proportion of his income; or

(b) that a third person is to pay to the trustee a specified proportion of money due to the debtor by way of income.

(4C) No agreement under subsection (4B) above may be entered into after the date on which the debtor's discharge becomes effective.

(4D) Subsection (2XA) above applies to agreements entered into under subsection (4B) above as it applies to orders made under subsection (2) above.

(4E) An agreement entered into under subsection (4B) above may, if subsection (4K) below has been complied with, be enforced, subject to subsection (4F) below, as if it were an order made under subsection (2) above.

(4F) Subsection (2ZA) above does not apply to an agreement entered into under subsection (4B) above.

(4G) An agreement entered into under subsection (4B) above may be varied—

(a) by written agreement between the parties; or

(b) by the sheriff, on an application made by the trustee, the debtor or any other interested person.

(4H) The sheriff—

(a) may not vary an agreement entered into under subsection (4B) above so as to include provision of a kind which could not be included in an order made under subsection (2) above; and

(b) shall grant an application to vary such an agreement if and to the extent that the sheriff thinks variation is necessary to determine a suitable amount to allow for the purposes specified in paragraphs (a) and (b) of subsection (2) above, being an amount which shall not be included in the amount to be paid to the trustee.

(4J) Where a third person pays a sum of money to the trustee under subsection (2YA) or (4B)(b) above, that person shall be discharged of any liability to the debtor to the extent of the sum of money so paid.

(4K) The trustee shall (unless he is the Accountant in Bankruptcy) send a copy of any agreement entered into under subsection (4B) above (and a copy of any variation of such an agreement) to the Accountant in Bankruptcy.

(4L) If the debtor fails to comply with an agreement entered into under subsection (4B) above, the sheriff, on the application of the trustee, may make an order under subsection (2) above—

(a) ending on the date on which the agreement would, had the debtor continued to comply with it, have ended; and

(b) on the same terms as the agreement.]

(5) Diligence [F12 (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 F2 . . . trustee if it had been part of the debtor’s estate on the date of sequestration,

shall vest in the F2 . . . 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 [F13 order] certified by the sheriff clerk [F14 or, as the case may be, by the Accountant in Bankruptcy appointing the trustee], convey or deliver the estate to the F15 . . . 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 F2 . . . 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 F2 . . . 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 F2 . . . trustee under [F16 this section or] section 31 of this Act shall be of no effect in a question with the F2 . . . trustee.

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

(a) that the F2 . . . 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 F2 . . . trustee; or

(iii) a banking transaction in the ordinary course of business between the banker and the debtor[F17 ; or

(iv) one which satisfies the conditions mentioned in subsection (9ZA) below,]

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.

[F18 (9ZA) The conditions are that —

(a) the dealing constitutes—

(i) the transfer of incorporeal moveable property; or

(ii) the creation, transfer, variation or extinguishing of a real right in heritable property,

for which the person dealing with the debtor has given adequate consideration to the debtor, or is willing to give adequate consideration to the trustee;

(b) the dealing requires the delivery of a deed; and

(c) the delivery occurs during the period beginning with the date of sequestration and ending on the day which falls 7 days after the day on which—

(i) the certified copy of the order of the sheriff granting warrant is recorded under subsection (1)(a) of section 14 of this Act; or

(ii) the certified copy of the determination of the Accountant in Bankruptcy awarding sequestration is recorded under subsection (1A) of that section,

in the register of inhibitions.]

[F19 (9A) Where the trustee has abandoned to the debtor any heritable property, notice in such form as may be prescribed given to the debtor by the trustee shall be sufficient evidence that the property is vested in the debtor.

(9B) Where the trustee gives notice under subsection (9A) above, he shall, as soon as reasonably practicable after giving the notice, record a certified copy of it in the register of inhibitions.]

(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(1) substituted (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 18(2), 227(3) (with s. 223); S.S.I. 2008/115, art. 3(1)(a) (with arts. 4-6, 10 (as amended (with effect from 31.1.2011) by S.S.I. 2011/31, art. 5))

F2 Words in s. 32 repealed (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 226, 227(3), Sch. 6 Pt. 1 (with s. 223); S.S.I. 2008/115, art. 3(2)(3), Sch. 2 (with arts. 4-6, 10 (as amended (with effect from 31.1.2011) by S.S.I. 2011/31, art. 5))

F3 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)

F4 S. 32(2WA)-(2ZA) inserted (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss 18(3), 227(3) (with s. 223); S.S.I. 2008/115, art. 3(1)(a) (with arts. 4-6, 10 (as amended (with effect from 31.1.2011) by S.S.I. 2011/31, art. 5))

F5 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

F6 S. 32(2A)(b) and preceding word omitted (6.4.2012) by virtue of The Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) (No.2) Order 2011 (S.I. 2011/1730), arts. 1(2)(b), 2(a)

F7 Words in s. 32(2A) substituted (6.4.2012) by The Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) (No.2) Order 2011 (S.I. 2011/1730), arts. 1(2)(b), 2(b)

F8 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)

F9 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.

F10 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.

F11 S. 32(4A)-(4L) inserted (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss 18(4), 227(3) (with s. 223); S.S.I. 2008/115, art. 3(1)(a) (with arts. 4-6, 10 (as amended (with effect from 31.1.2011) by S.S.I. 2011/31, art. 5))

F12 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.

F13 Words in s. 32(6) substituted (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 36, 227(3), Sch. 1 para. 32(a) (with s. 223); S.S.I. 2008/115, art. 3(1)(i) (with arts. 4-6, 10 (as amended (with effect from 31.1.2011) by S.S.I. 2011/31, art. 5))

F14 Words in s. 32(6) substituted (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 36, 227(3), Sch. 1 para. 32(b) (with s. 223); S.S.I. 2008/115, art. 3(1)(i) (with arts. 4-6, 10 (as amended (with effect from 31.1.2011) by S.S.I. 2011/31, art. 5))

F15 Words in s. 32 repealed (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 226, 227(3), Sch. 6 Pt. 1 (with s. 223); S.S.I. 2008/115, art. 3(1)(h)(2)(3), Sch. 2 (with arts. 4-6, 10) (as amended (with effect from 31.1.2011) by S.S.I. 2011/31, art. 5)

F16 Words in s. 32(8) inserted (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss 17(2)(a), 227(3) (with s. 223); S.S.I. 2008/115, art. 3(1)(a) (with arts. 4-6, 10 (as amended (with effect from 31.1.2011) by S.S.I. 2011/31, art. 5))

F17 S. 32(9)(b)(iv) and preceding word inserted (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss 17(2)(b), 227(3) (with s. 223); S.S.I. 2008/115, art. 3(1)(a) (with arts. 4-6, 10 (as amended (with effect from 31.1.2011) by S.S.I. 2011/31, art. 5))

F18 S. 32(9ZA) inserted (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss 17(2)(c), 227(3) (with s. 223); S.S.I. 2008/115, art. 3(1)(a) (with arts. 4-6, 10) (as amended (with effect from 31.1.2011) by S.S.I. 2011/31, art. 5)

F19 S. 32(9A)(9B) inserted (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 19(1), 227(3) (with s. 223); S.S.I. 2008/115, art. 3(1)(a) (with arts. 4-6, 10 (as amended (with effect from 31.1.2011) by S.S.I. 2011/31, art. 5))

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.