Bankruptcy (Scotland) Act 1985 (repealed)

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

(1) Subject to [F1 sections 32A to 32H] 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.

F3 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (2WA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (2XA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (2YA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (2ZA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (4B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (4C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (4D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (4E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (4F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (4G) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (4H) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (4J) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (4K) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (4L) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Diligence [F4 (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[F5 , 54A or 54C] thereof shall not be competent against income vesting in him under subsection (1) above.

[F6 (5A) Where the trustee knows, or becomes aware, of any estate vested in the trustee under section 31 or this section which comprises funds held by a bank, the trustee must serve a notice on the bank—

(a) informing the bank of the sequestration, and

(b) specifying reasonable detail in order to allow the bank to identify the debtor and the funds held.

(5B) A notice under subsection (5A)—

(a) must be in writing and may be sent—

(i) by first class post or by using a registered or recorded delivery postal service to the bank,

(ii) in some other manner (including by electronic  means) which the trustee reasonably considers likely to cause it to be delivered to the bank on the same or next day,

(b) is deemed to have been received the day after it is sent.]

(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 [F7 order] certified by the sheriff clerk [F8 or, as the case may be, by the Accountant in Bankruptcy appointing the trustee], convey or deliver the estate to the F9 . . . 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

(ia)

[F10 the trustee is not entitled by virtue of this subsection to any remedy against a bank in respect of a banking transaction entered into before the receipt by the bank of a notice under subsection (5A) (whether or not the bank is aware of the sequestration),]

(ii)

this subsection shall be without prejudice to any right F11 ... 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) [F12 and (9C)] below, any dealing of or with the debtor relating to his estate vested in the F2 . . . trustee under [F13 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

F14 (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F15 (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.

[F16 (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.]

[F17 (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.]

[F18 (9C) Subsection (8) does not apply where the dealing is a banking transaction entered into before the receipt by the bank of a notice under subsection (5A) (whether or not the bank is aware of the sequestration).]

(10) In this section “a relevant date” means a date after the date of sequestration and before the date [F19 which is 4 years after the date of sequestration] .

[F20 (11) In this section “bank” has the same meaning as “appropriate bank or institution” in section 73(1).]

Textual Amendments

F1 Words in s. 32(1) substituted (1.4.2015) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), s. 57(2), sch. 3 para. 20(a); S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

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 S. 32(2)-(4L) repealed (1.4.2015) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), s. 57(2), sch. 4; S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

F4 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.

F5 Words in s. 32(5) inserted (1.4.2015) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), s. 57(2), sch. 3 para. 20(b); S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

F6 S. 32(5A)(5B) inserted (1.4.2015) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 13(a), 57(2); S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

F7 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))

F8 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))

F9 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)

F10 S. 32(6)(ia) inserted (1.4.2015) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 13(b), 57(2); S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

F11 Words in s. 32(6) repealed (1.4.2015) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), s. 57(2), sch. 4; S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

F12 Words in s. 32(8) inserted (1.4.2015) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 13(c), 57(2); S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

F13 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))

F14 S. 32(9)(b)(iii) repealed (1.4.2015) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), s. 57(2), sch. 4; S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

F15 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))

F16 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)

F17 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))

F18 S. 32(9C) inserted (1.4.2015) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 13(d), 57(2); S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

F19 Words in s. 32(10) substituted (1.4.2015) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 16(2), 57(2); S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

F20 S. 32(11) inserted (1.4.2015) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 13(e), 57(2); S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

Modifications etc. (not altering text)

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

C2 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.

C3 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)