Bankruptcy (Scotland) Act 1985 (repealed) (c. 66)

Discharge of debtor U.K.

[F1 54 Discharge where Accountant in Bankruptcy not the trustee U.K.

(1) This section applies where the Accountant in Bankruptcy is not the trustee.

(2) The Accountant in Bankruptcy may discharge the debtor at any time after the date which is 12 months after the date on which sequestration is awarded by granting a certificate of discharge in the prescribed form.

(3) Before deciding whether to discharge the debtor under subsection (2), the Accountant in Bankruptcy must—

(a) consider the report provided by the trustee under subsection (4), and

(b) take into account any representations received during the period mentioned in subsection (6)(b).

(4) The trustee must prepare and send a report to the Accountant in Bankruptcy—

(a) without delay after the date which is 10 months after the date on which sequestration is awarded, and

(b) if the debtor is not otherwise discharged, before sending to the Accountant in Bankruptcy the documentation referred to in section 57(1)(b).

(5) The report must include—

(a) information about—

(i) the debtor’s assets, liabilities, financial affairs and business affairs,

(ii) the debtor’s conduct in relation to those assets, liabilities, financial affairs and business affairs,

(iii) the sequestration, and

(iv) the debtor’s conduct in the course of the sequestration,

(b) a statement of whether, in the opinion of the trustee, the debtor has as at the date of the report—

(i) complied with any debtor contribution order,

(ii) co-operated with the trustee in accordance with section 64,

(iii) complied with the statement of undertakings,

(iv) made a full and fair surrender of the debtor’s estate,

(v) made a full disclosure of all claims which the debtor is entitled to make against other persons, and

(vi) delivered to the trustee every document under the debtor’s control relating to the debtor’s estate, business or financial affairs, and

(c) a statement of whether the trustee has, as at the date that the report is sent to the Accountant in Bankruptcy, carried out all of the trustee’s functions in accordance with section 3.

(6) The trustee must, at the same time as sending a report to the Accountant in Bankruptcy under this section, give to the debtor and every creditor known to the trustee—

(a) a copy of the report, and

(b) a notice informing the recipient that the person has a right to make representations to the Accountant in Bankruptcy in relation to the report before the expiry of the period of 28 days beginning with the day on which the notice is given.

(7) A discharge under this section must not take effect before the end of the period of 14 days beginning with the day of notification of the decision.

Textual Amendments

F1 Ss. 54-54B substituted for s. 54 (30.6.2014 for specified purposes, 1.4.2015 in so far as not already in force) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 17, 57(2); S.S.I. 2014/172, art. 2, sch.; S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

54A Discharge where Accountant in Bankruptcy the trustee U.K.

(1) This section applies where the Accountant in Bankruptcy is the trustee.

(2) The Accountant in Bankruptcy may discharge the debtor at any time after the date which is 12 months after the date on which sequestration is awarded by granting a certificate of discharge in the prescribed form.

(3) The Accountant in Bankruptcy must, as soon as is practicable after the date which is 12 months after the date on which sequestration is awarded—

(a) decide whether to discharge the debtor under subsection (2),

(b) notify the debtor and every creditor known to the Accountant in Bankruptcy of that decision, and

(c) send a report to those persons.

(4) The report must give an account of—

(a) the debtor’s assets, liabilities, financial affairs and business affairs,

(b) the debtor’s conduct in relation to those assets, liabilities, financial affairs and business affairs,

(c) the sequestration, and

(d) the debtor’s conduct in the course of the sequestration, including compliance with the statement of undertakings.

(5) Subsection (6) applies where—

(a) the Accountant in Bankruptcy refuses to discharge the debtor under subsection (2), and

(b) the debtor is not otherwise discharged.

(6) The Accountant in Bankruptcy must, as soon as is practicable after the date which is 12 months after the date of the refusal—

(a) decide whether to discharge or refuse to discharge the debtor under subsection (2),

(b) notify the debtor and every creditor known to the Accountant in Bankruptcy of that decision, and

(c) send a report giving an account of the matters mentioned in subsection (4) to those persons.

(7) A discharge under this section must not take effect before the end of the period of 14 days beginning with the day of notification of the decision.

Textual Amendments

F1 Ss. 54-54B substituted for s. 54 (30.6.2014 for specified purposes, 1.4.2015 in so far as not already in force) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 17, 57(2); S.S.I. 2014/172, art. 2, sch.; S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

54B Discharge of debtor: review and appeal U.K.

(1) The trustee or the debtor may apply to the Accountant in Bankruptcy for a review of a decision under section 54(2) or 54A(2) to refuse to discharge the debtor.

(2) Any creditor may apply to the Accountant in Bankruptcy for a review of a decision under section 54(2) or 54A(2) to discharge the debtor.

(3) An application under subsection (1) or (2) must be made before the end of the period of 14 days beginning with the day of notification of the decision under section 54(2) or, as the case may be, 54A(2).

(4) If an application for a review under subsection (2) is made, the discharge is suspended until the determination of that review by the Accountant in Bankruptcy.

(5) If an application for a review under subsection (1) or (2) is made, the Accountant in Bankruptcy must—

(a) take into account any representations made by an interested person before the expiry of the period of 21 days beginning with the day on which the application is made, and

(b) confirm or revoke the decision before the expiry of the period of 28 days beginning with the day on which the application is made.

(6) The debtor, the trustee or any creditor may appeal to the sheriff against any decision of the Accountant in Bankruptcy under subsection (5)(b) before the end of the period of 14 days beginning with the date of the decision.]

Textual Amendments

F1 Ss. 54-54B substituted for s. 54 (30.6.2014 for specified purposes, 1.4.2015 in so far as not already in force) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 17, 57(2); S.S.I. 2014/172, art. 2, sch.; S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

[F2 54C Debtor to whom section 5(2ZA) applies: discharge U.K.

(1) Where section 5(2ZA) applies to a debtor, the debtor is discharged on the date which is 6 months after the date on which sequestration is awarded.

(2) A debtor may, following a discharge, apply to the Accountant in Bankruptcy for a certificate of discharge in the prescribed form.]

Textual Amendments

F2 S. 54C inserted (30.6.2014 for specified purposes, 1.4.2015 in so far as not already in force) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 7(1), 57(2); S.S.I. 2014/172, art. 2, sch.; S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

[F3 54D Deferral of discharge where debtor cannot be traced U.K.

(1) Subsection (2) applies where—

(a) the trustee, having made reasonable inquiries, is unable to ascertain the whereabouts of the debtor, and

(b) as a result is unable to carry out the trustee’s functions in accordance with section 3.

(2) The trustee must—

(a) notify the debtor by sending to the last known address of the debtor a deferral notice in the prescribed form,

(b) give a deferral notice to every creditor known to the trustee, and

(c) where the trustee is not the Accountant in Bankruptcy, apply in the prescribed form to the Accountant in Bankruptcy for a deferral.

(3) A deferral application under subsection (2)(c) must be made by the trustee—

(a) no earlier than the date which is 8 months after the date on which sequestration is awarded, and

(b) no later than the date which is 10 months after the date on which sequestration is awarded.

(4) After receiving a deferral application, the Accountant in Bankruptcy must—

(a) take into account any representations made by an interested person before the expiry of the period of 14 days beginning with the day on which the application is made, and

(b) if satisfied of the matters mentioned in subsection (5), issue a certificate deferring indefinitely the discharge of the debtor.

(5) The matters are—

(a) that the trustee is unable to ascertain the whereabouts of the debtor, and

(b) it would not be reasonably practicable for the trustee to continue to search for the debtor.

(6) Where the Accountant in Bankruptcy is the trustee and has given a deferral notice in accordance with subsection (2)(b), the Accountant in Bankruptcy must—

(a) take into account any representations made by an interested person before the expiry of the period of 14 days beginning with the day on which the deferral notice is given, and

(b) if satisfied that it would not be reasonably practicable to continue to search for the debtor, issue a certificate deferring indefinitely the discharge of the debtor.

(7) Where a certificate is issued under subsection (4)(b) or (6)(b), the Accountant in Bankruptcy must make an appropriate entry in the register of insolvencies.

Textual Amendments

F3 Ss. 54D-54G inserted (30.6.2014 for specified purposes, 1.4.2015 in so far as not already in force) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 19, 57(2); S.S.I. 2014/172, art. 2, sch.; S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

54E Debtor not traced: new trustee U.K.

(1) This section applies where a certificate is issued under section 54D(4)(b).

(2) The trustee may apply to the Accountant in Bankruptcy in the prescribed form for authority to resign office.

(3) An application under subsection (2) must include details of every creditor known to the trustee.

(4) An application under subsection (2) may not be made—

(a) if after the certificate is issued the trustee ascertains the whereabouts of the debtor or the debtor makes contact with the trustee,

(b) after the date which is 6 months after the date on which the certificate is awarded.

(5) Where an application is made under subsection (2), the Accountant in Bankruptcy must issue to the trustee who made the application a notice in the prescribed form granting the application.

(6) Where a notice is issued under subsection (5)—

(a) the Accountant in Bankruptcy is deemed to be the trustee,

(b) the Accountant in Bankruptcy must notify every creditor known to the Accountant in Bankruptcy that the Accountant in Bankruptcy is deemed to be the trustee,

(c) the former trustee is not entitled to recover outlays and remuneration payable in accordance with section 53 other than by a claim in the final distribution of the debtor’s estate, and

(d) subsections (6) to (8) of section 28 apply in relation to the appointment of the Accountant in Bankruptcy as the new trustee as they apply in relation to the appointment of a new trustee under that section.

Textual Amendments

F3 Ss. 54D-54G inserted (30.6.2014 for specified purposes, 1.4.2015 in so far as not already in force) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 19, 57(2); S.S.I. 2014/172, art. 2, sch.; S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

54F Debtor not traced: subsequent debtor contact U.K.

(1) This section applies where—

(a) a certificate is issued under section 54D(4)(b) or (6)(b), and

(b) the trustee ascertains the whereabouts of the debtor or the debtor makes contact with the trustee.

(2) Where the Accountant in Bankruptcy is the trustee, the Accountant in Bankruptcy may discharge the debtor at any time after the date which is 12 months after the date on which—

(a) the whereabouts of the debtor were ascertained, or

(b) the debtor made contact with the trustee.

(3) Where the Accountant in Bankruptcy is not the trustee, the trustee must prepare and send a report to the Accountant in Bankruptcy without delay after the date which is 10 months after the earlier of the date on which—

(a) the whereabouts of the debtor were ascertained by the trustee, or

(b) the debtor made contact with the trustee.

(4) If the trustee sends a report to the Accountant in Bankruptcy under subsection (3)—

(a) the report must include the matters included in a report sent to the Accountant in Bankruptcy in accordance with subsection (5) of section 54, and

(b) subsection (6) of that section applies to the report as it applies to a report sent in accordance with subsection (4) of that section.

(5) After receiving a report under subsection (3), the Accountant in Bankruptcy may discharge the debtor by granting a certificate of discharge in the prescribed form.

(6) Before deciding whether to discharge the debtor under subsection (5), the Accountant in Bankruptcy must—

(a) consider the report prepared by the trustee under subsection (3), and

(b) take into account any representations received during the period mentioned in subsection (6) of section 54 (as applied in accordance with subsection (4)).

(7) A discharge under subsection (2) or (5) must not take effect on a date before the end of the period of 14 days beginning with the day of notification of the decision.

(8) A discharge under subsection (2) or (5) is deemed for the purposes of section 55 to have been given under section 54(2).

Textual Amendments

F3 Ss. 54D-54G inserted (30.6.2014 for specified purposes, 1.4.2015 in so far as not already in force) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 19, 57(2); S.S.I. 2014/172, art. 2, sch.; S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

54G Subsequent debtor contact: review and appeal U.K.

(1) The debtor may apply to the Accountant in Bankruptcy for a review of a decision under section 54F(2) or (5) to refuse to discharge the debtor.

(2) Any creditor may apply to the Accountant in Bankruptcy for a review of a decision under section 54F(2) or (5) to discharge the debtor.

(3) An application under subsection (1) or (2) must be made before the end of the period of 14 days beginning with the day of notification of the decision under section 54F(2) or, as the case may be, 54F(5).

(4) If an application for a review under subsection (2) is made, the discharge is suspended until the determination of that review by the Accountant in Bankruptcy.

(5) If an application for a review under subsection (1) or (2) is made, the Accountant in Bankruptcy must—

(a) take into account any representations made by an interested person before the expiry of the period of 21 days beginning with the day on which the application is made, and

(b) confirm or revoke the decision before the expiry of the period of 28 days beginning with the day on which the application is made.

(6) The debtor, the trustee or any creditor may appeal to the sheriff against any decision of the Accountant in Bankruptcy under subsection (5)(b) before the end of the period of 14 days beginning with the date of the decision.]

Textual Amendments

F3 Ss. 54D-54G inserted (30.6.2014 for specified purposes, 1.4.2015 in so far as not already in force) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 19, 57(2); S.S.I. 2014/172, art. 2, sch.; S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

55 Effect of discharge under section 54. U.K.

(1) Subject to [F4 subsections (2) and (3)] below, on the debtor’s discharge under section 54 of this Act, the debtor shall be discharged within the United Kingdom of all debts and obligations contracted by him, or for which he was liable, at the date of sequestration.

(2) The debtor shall not be discharged by virtue of subsection (1) above from—

(a) any liability to pay a fine or other penalty due to the Crown;

[F5 (aa) any liability to pay a fine imposed in a district court;

(ab) any liability under a compensation order within the meaning of section 249 of the Criminal Procedure (Scotland) Act 1995;]

(b) any liability to forfeiture of a sum of money deposited in court under section 1(3) of the M1 Bail etc. (Scotland) Act 1980;

(c) any liability incurred by reason of fraud or breach of trust;

(d) any obligation to pay aliment or any sum of an alimentary nature under any enactment or rule of law or any periodical allowance payable on divorce by virtue of a court order or under an obligation, not being

[F6 (i)] aliment or a periodical allowance which could be included in the amount of a creditor’s claim under paragraph 2 of Schedule 1 to this Act; [F7 or

(ii) child support maintenance within the meaning of the Child Support Act 1991 which was unpaid in respect of any period before the date of sequestration of—

(aa) any person by whom it was due to be paid; or

(bb) any employer by whom it was, or was due to be, deducted under section 31(5) of that Act.]

(e) the obligation imposed on him by section 64 of this Act.

[F8 (3) The discharge of the debtor under the said section 54 shall not affect any right of a secured creditor—

(a) for a debt in respect of which the debtor has been discharged to enforce his security for payment of the debt and any interest due and payable on the debt until the debt is paid in full; or

(b) for an obligation in respect of which the debtor has been discharged to enforce his security in respect of the obligation.]

F9 [F10 (4) In subsection (2)(a) above the reference to a fine or other penalty due to the Crown includes a reference to a confiscation order made under Part 2, 3 or 4 of the Proceeds of Crime Act 2002.]

Textual Amendments

F4 Words in s. 55(1) substituted (retrospectively) by 1993 c. 6, s. 11(3), Sch. 1 para. 23(2)(4)

F5 S. 55(2)(aa)(ab) inserted (S.) (1.4.1996) by 1995 c. 40, ss. 5, 7(2), Sch. 4 para. 58(4)

F6 Word "(i)" inserted (4.4.1993) by Child Support Act 1991 (c. 48, SIF 20), s. 58(13), Sch. 5 para. 6(4)(a) (with s. 9(2)); S.I. 1992/2644, art. 2.

F7 Word "or" and s. 55(2)(d)(ii) inserted (4.4.1993) by Child Support Act 1991 (c. 48, SIF 20), s. 58(13), Sch. 5 para. 6(4)(b) (with s. 9(2)); S.I. 1992/2644, art. 2.

F8 S. 55(3) inserted (retrospectively) by 1993 c. 6, s. 11(3), Sch. 1 para. 23(3)(4)

F9 S. 55(4): by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 36, 227(3), Sch. 1 para. 47 (with s. 223), it is provided (1.4.2008) that, in s. 55, subsection (3) (references to a fine or penalty to include a confiscation order), as inserted by paragraph 15(5) of Schedule 11 to the Proceeds of Crime Act 2002 (c. 29), is renumbered as subsection (2A); 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))

F10 S. 55(4) inserted (24.3.2003) by Proceeds of Crime Act 2002 (c. 29), ss. 456, 458(1)(3), Sch. 11 para. 15(5); S.I. 2003/333, art. 2(1), Sch. (subject to transitional provisions in arts. 3-14) (as amended by S.I. 2003/531); S.S.I. 2003/210, art. 2(1)(b), Sch. (subject to transitional provisions in arts. 3-7)

Modifications etc. (not altering text)

C1 S. 55(2) amended (E.W.S.) by Drug Trafficking Offences Act 1986 (c. 32, SIF 39:1), s. 39(6)

C2 S. 55(2) amended by Criminal Justice (Scotland) Act 1987 (c. 41, SIF 39:1), ss. 45(5)(c), 47(4)(a)

C3 S. 55(2) amended by Criminal Justice Act 1988 (c. 33, SIF 39:1), ss. 123, 170, Sch. 8 para. 16, Sch. 15 para. 109

C4 S. 55(2) extended (3.2.1995) by 1994 c. 37, ss. 65(4), 69(2)

S. 55(2) extended (S.) (1.4.1996) by 1995 c. 43, ss. 47(3), 50(2)

C5 S. 55(2) excluded (S.) (31.3.1996) by 1995 c. 20, ss. 113(7); S.I. 1996/517, art. 3(2)

Marginal Citations

M1 1980 c. 4.

[F11 55A Discharge under section 54C: conditions U.K.

(1) This section applies where a debtor is discharged under section 54C.

(2) During the relevant period the debtor must comply with the condition in subsection (3) before the debtor, either alone or jointly with another person, obtains credit—

(a) to the extent of £2000 (or such other sum as may be prescribed) or more, or

(b) of any amount where, at the time of obtaining credit, the debtor has debts amounting to £1000 (or such other sum as may be prescribed) or more.

(3) The condition is that the debtor must inform the person who is providing credit to the debtor (or, as the case may be, jointly to the debtor and another person) that the debtor is required to comply with the conditions in this section.

(4) During the relevant period, the debtor must not engage (whether directly or indirectly) in a business under a name other than that to which the discharge relates unless the debtor complies with the condition in subsection (5).

(5) The condition is that the debtor must inform any person with whom the debtor enters into any business transaction of the name of the business to which the discharge relates.

(6) In this section, “relevant period” means the period of 6 months beginning with the date of discharge.

Textual Amendments

F11 Ss. 55A, 55B inserted (30.6.2014 for specified purposes, 1.4.2015 in so far as not already in force) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 7(2), 57(2); S.S.I. 2014/172, art. 2, sch.; S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

55B Section 55A: sanctions U.K.

(1) If a debtor fails to comply with the requirement imposed by subsection (2) or (4) of section 55A, that section applies in relation to the debtor as if the relevant period were the period of 12 months beginning with the date of discharge of the debtor.

(2) If a debtor fails to comply with the requirement imposed by subsection (2) or (4) of section 55A during the period when the section applies in relation to the debtor by virtue of subsection (1), the debtor commits an offence.

(3) A debtor who is guilty of an offence under subsection (2) is liable on summary conviction to—

(a) a fine not exceeding the statutory maximum,

(b) imprisonment for—

(i) a term not exceeding 3 months, or

(ii) a term not exceeding 6 months, if the person has previously been convicted of an offence inferring dishonest appropriation of property or an attempt at such appropriation, or

(c) both such fine and imprisonment.

(4) A debtor who is guilty of an offence under subsection (2) is liable on conviction on indictment to—

(a) a fine,

(b) imprisonment for a term not exceeding 2 years, or

(c) both such fine and imprisonment.]

Textual Amendments

F11 Ss. 55A, 55B inserted (30.6.2014 for specified purposes, 1.4.2015 in so far as not already in force) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), ss. 7(2), 57(2); S.S.I. 2014/172, art. 2, sch.; S.S.I. 2014/261, art. 3 (with arts. 4-7, 12) (as amended by S.S.I. 2015/54, art. 2)

56 Discharge on Composition. S

Schedule 4 to this Act shall have effect in relation to an offer of composition by or on behalf of the debtor to the F12 . . . trustee in respect of his debts and his discharge and the discharge of the F12 . . . trustee where the offer is approved.

Textual Amendments

F12 Words in s. 56 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))