F48Vesting of estate in trustee
31 Vesting of estate at date of sequestration.
1
Subject to section 33 of this Act F1and section 91(3) of the Pensions Act 1995, the whole estate of the debtor shall F2, by virtue of the trustee's appointment, vest F3in the trustee as at the date of sequestration F4. . . for the benefit of the creditorsF5. . .
a
F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b
F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
F61A
It shall not be competent for—
a
the trustee; or
b
any person deriving title from the trustee,
to complete title to any heritable estate in Scotland vested in the trustee by virtue of his appointment before the expiry of the period mentioned in subsection (1B) below.
1B
That period is the period of 28 days (or such other period as may be prescribed) beginning with the day on which—
a
the certified copy of the order of the sheriff granting warrant is recorded under subsection (1)(a) of section 14 of this Act; or
b
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.
2
3
Where the debtor has an uncompleted title to any heritable estate in Scotland, the F7. . . trustee may complete title thereto either in his own name or in the name of the debtor, but completion of title in the name of the debtor shall not validate by accretion any unperfected right in favour of any person other than the F7. . . trustee.
4
Any moveable property, in respect of which but for this subsection—
a
delivery or possession; or
b
intimation of its assignation,
5
Any non-vested contingent interest which the debtor has shall vest in the F7. . . trustee as if an assignation of that interest had been executed by the debtor and intimation thereof made at the date of sequestration.
F105A
Any non-vested contingent interest vested in the trustee by virtue of subsection (5) above shall, where it remains so vested in the trustee on the date on which the debtor's discharge becomes effective, be reinvested in the debtor as if an assignation of that interest had been executed by the trustee and intimation thereof made at that date.
6
Any person claiming a right to any estate claimed by the F7. . . trustee may apply to the F11sheriff for the estate to be excluded from such vesting, a copy of the application being served on the F7. . . trustee; and the F11sheriff shall grant the application if F12he is satisfied that the estate should not be so vested.
7
C1C28
In subsection (1) above F14, subject to section 31A of this Act, the “whole estate of the debtor” means F15, subject to subsection (9) below F16F17 and to F18sections 71(10B), 78(3B) and 89(2) of the Social Security Administration Act 1992, his whole estate at the date of sequestration, wherever situated, including—
a
any income or estate vesting in the debtor on that date;
F19aa
any property of the debtor, title to which has not been completed by another person deriving right from the debtor; and
b
the capacity to exercise and to take proceedings for exercising, all such powers in, over, or in respect of any property as might have been exercised by the debtor for his own benefit as at, or on, the date of sequestration or might be exercised on a relevant date (within the meaning of section 32(10) of this Act).
F209
Subject to subsection (10) below, the “whole estate of the debtor” does not include any interest of the debtor as tenant under any of the following tenancies—
a
a tenancy which is an assured tenancy within the meaning of Part II of the M1 Housing (Scotland) Act 1988, or
b
a protected tenancy within the meaning of the M2 Rent (Scotland) Act 1984 in respect of which, by virtue of any provision of Part VIII of that Act, no premium can lawfully be required as a condition of the assignation, or
F21c
a Scottish secure tenancy within the meaning of the Housing (Scotland) Act 2001 (asp 10).
10
On the date on which the F7. . . trustee serves notice to that effect on the debtor, the interest of the debtor as tenant under any of the tenancies referred to in subsection (9) above shall form part of his estate and vest in the F7. . . trustee as if it had vested in him under section 32(6) of this Act.
F2231ZAF49Proceedings under EC Regulation: modified definition of “estate”
In the application of this Act to insolvency proceedings under the EC Regulation, a reference to “estate” is a reference to estate which may be dealt with in those proceedings.
31AF50 Property subject to restraint order
1
This section applies where—
a
property is excluded from the debtor’s estate by virtue of section 420(2)(a) of the Proceeds of Crime Act 2002 (property subject to a restraint order),
b
c
the restraint order is discharged.
2
On the discharge of the restraint order the property vests in the F25. . . trustee as part of the debtor’s estate.
3
But subsection (2) does not apply to the proceeds of property realised by a management receiver under section 49(2)(d) or 197(2)(d) of that Act (realisation of property to meet receiver’s remuneration and expenses).
31B Property in respect of which receivership or administration order is made
1
This section applies where—
a
property is excluded from the debtor’s estate by virtue of section 420(2)(b), (c) or (d) of the Proceeds of Crime Act 2002 (property in respect of which an order for the appointment of a receiver or administrator under certain provisions of that Act is in force),F26. . .
b
a confiscation order is made under section 6, 92 or 156 of that Act,
c
the amount payable under the confiscation order is fully paid, and
d
any of the property remains in the hands of the receiver or administrator (as the case may be).
2
The property vests in the F27. . . trustee as part of the debtor’s estate.
31C Property subject to certain orders where confiscation order discharged or quashed
1
This section applies where—
a
property is excluded from the debtor’s estate by virtue of section 420(2)(a), (b), (c) or (d) of the Proceeds of Crime Act 2002 (property in respect of which a restraint order or an order for the appointment of a receiver or administrator under that Act is in force),
b
a confiscation order is made under section 6, 92 or 156 of that Act, and
c
the confiscation order is discharged under section 30, 114 or 180 of that Act (as the case may be) or quashed under that Act or in pursuance of any enactment relating to appeals against conviction or sentence.
2
Any property in the hands of a receiver appointed under Part 2 or 4 of that Act or an administrator appointed under Part 3 of that Act vests in the F28. . . trustee as part of the debtor’s estate.
3
But subsection (2) does not apply to the proceeds of property realised by a management receiver under section 49(2)(d) or 197(2)(d) of that Act (realisation of property to meet receiver’s remuneration and expenses).
32 Vesting of estate, and dealings of debtor, after sequestration.
1
C32
F31Notwithstanding anything in section 11 or 12 of the Welfare Reform and Pensions Act 1999, the sheriff, on the application of the F30. . . 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 F30. . . trustee.
F322WA
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.
F332A
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 M3Family Law (Scotland) Act 1985);
b
any obligation of his to make a periodical allowance to a former spouse F34or former civil partner ;
F35c
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 F36referred 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 F30. . . trustee, the debtor or any other interested person, may vary or recall any order under subsection (2) above.
F374A
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 F38(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.
C46
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 F30. . . trustee if it had been part of the debtor’s estate on the date of sequestration,
shall vest in the F30. . . 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 F39order certified by the sheriff clerk F40or, as the case may be, by the Accountant in Bankruptcy appointing the trustee , convey or deliver the estate to the F41. . . 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 F30. . . 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 F30. . . 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.
C5C68
9
Subsection (8) above shall not apply where the person seeking to uphold the dealing establishes—
a
that the F30. . . 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 F30. . . trustee; or
iii
a banking transaction in the ordinary course of business between the banker and the debtorF43; 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.
F449ZA
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.
F459A
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.
33 Limitations on vesting.
1
The following property of the debtor shall not vest in the F46. . . trustee—
F47C7a
any property kept outwith a dwellinghouse in respect of which attachment is, by virtue of section 11(1) of the Debt Arrangement and Attachment (Scotland) Act 2002 (asp 17), incompetent;
aa
any property kept in a dwellinghouse which is not a non-essential asset for the purposes of Part 3 of that Act;
b
property held on trust by the debtor for any other person.
2
The vesting of a debtor’s estate in a F46. . . trustee shall not affect the right of hypothec of a landlord.
3
Sections 31 and 32 of this Act are without prejudice to the right of any secured creditor which is preferable to the rights of the F46. . . trustee.
Cross-heading preceding s. 31 substituted (1.4.2008) by virtue of Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 36, 227(3), Sch. 1 para. 30(6) (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))