Notes for Guidance - Bankruptcy (Scotland) Act 2016 (as amended)

This section refers to Part 8 of the Act, sections 108 to 117.

It is the duty of the trustee to ingather the estate and to manage and realise it for the benefit of the creditors. It is implicit the trustee should be efficient and economical in the exercise of their functions in order to optimise the return to the unsecured creditors.

The trustee must take care to clarify any funds received from the debtor are not derived from Social Security benefits or tax credits as these do not vest in the trustee under section 187(1) of the Social Security Administration Act 1992 and the Tax Credits Act 2002.

If a debtor inadvertently pays money from this type of source the trustee must return the funds. This applies even if the payment is made voluntarily and in full knowledge of the rules on the inalienability of these funds.

The trustee is entitled to access any documents relating to a debtor’s assets, business or financial affairs. The trustee can request delivery to them of any title deed or other document of the debtor held by the debtor, or a third party, and to make copies of these documents.

When a person obstructs the trustee in obtaining documents consideration should be taken to making an application to the sheriff to order the obstruction to cease. This would afford the trustee the opportunity to obtain sufficient information to determine whether it is to the advantage of the bankruptcy to recognise a claim for a lien from that party in order to obtain possession of principal documents. However, in many cases this will prove not to be necessary and claims by creditors for a preference will fall to be rejected by the trustee.