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

When a debtor cannot be traced the trustee can apply to the BAI team to request the deferment of a debtor’s discharge under section 141 of the Act.

An application must be made to the BAI team between eight and 10 months after the award of bankruptcy.

14.2.1 Actions of the trustee

The Accountant expects the trustee to have carried out a number of actions in order to try to find and contact the debtor prior to making an application to defer the debtor’s discharge indefinitely.

There may be occasion when the trustee has had some initial contact with the debtor but the debtor has since ‘disappeared’ and can no longer be traced. In these circumstances deferral cannot be considered and the trustee should take action not to discharge the debtor under section 137 (see section 14.1).

If the trustee has not been able to contact the debtor since they were appointed trustee they must be able to demonstrate they have:

• written to the debtor on a minimum of three occasions, to all addresses where the trustee believes the debtor may be living, asking them to contact their trustee and detailing the potential consequences if they do not comply with this request
• emailed the debtor at all email address(es) recorded, asking them to contact their trustee and detailing the potential consequences if they do not comply with this request
• appointed Sheriff Officers to attempt personal service on the debtor of a letter asking them to contact their trustee and detailing the potential consequences if they do not comply with this request
• made an attempt to serve the letter by Sheriff Officers should be done at each address where the trustee believes the debtor may be living and the Sheriff Officers must provide a written report(s) supporting the belief that the debtor does not live at the address(es) and their whereabouts are not known
• telephoned, on at least five occasions and at various times, all phone numbers the trustee has obtained for the debtor and recorded the outcomes of these phone calls
• checked the electoral register for each known possible address of the debtor and noted if the debtor, is, or isn’t, recorded at each address checked
• contacted the local authority(s) and established who is registered for paying the council tax for each property the debtor is believed to possibly reside at and establish if council tax is being paid and by whom
• made enquiries regarding the debtor’s whereabouts with any relative, friend or employer of the debtor that is known to the trustee and recorded the outcome of these enquiries
• completed an Experian check for the debtor
• employed a tracing agent to try and locate the debtor and recorded the outcome of this investigation

The trustee should also provide supporting evidence to show they have been unable to carry out their functions under the Act:

• a written record of the actions they have carried out to try and locate the debtor and the outcomes
• a written explanation of any actions they have not been able to undertake
• copies of reports received from sheriff officers, tracing agents and any other persons appointed to try and locate the debtor
• detail of the trustee’s functions that they are not able to complete due to the debtor’s whereabouts not being known
• any other information they believe supports their claim that the debtor cannot be traced.

14.2.2 Application to the Accountant

The application should be created on BASYS or using a Form 29 of The Regulations. 

At the same time as submitting the application, the trustee must send a Form 28 of The Regulations, to the debtor’s last known address(es) andevery known creditor

advising of their right to make written representation to the BAI team within 14 days of the date of the application.

14.2.3 Actions of AST

The BAI team will:

• consider the information provided by the trustee and if appropriate request further information and/or evidence
• consider any representations received with the specified timescale

14.2.4 Actions of the Accountant

When the Accountant is satisfied the trustee is unable to ascertain the whereabouts of the debtor and it would not be reasonably practicable for the trustee to continue to search for the debtor, the BAI team will:

• issue a certificate deferring the discharge of the debtor indefinitely using a Form 30 ofThe Regulations
• place a copy of the certificate in the electronic Sederunt Book
• make the appropriate entry on the Register of Insolvencies

14.2.5 Debtor not traced - new trustee

When a certificate deferring discharge has been issued the trustee may apply to resign from office if:

• the debtor has not been traced or made contact with the trustee;
• the application is made within six months of the certificate deferring discharge being granted

The trustee must send to the BAI team:

• a Form 31 of The Regulations;
• details of every known creditor known to the trustee

The Accountant will grant the resignation of the trustee and the Accountant in Bankruptcy will be deemed to be the trustee.

The former trustee is not entitled to recover outlays and remuneration payable in accordance with section 132 of the Act other than by a claim in the final distribution of the debtor’s estate.

Sections 69(9) and (10) of the Act applies to the Accountant in Bankruptcy as a new trustee.

14.2.6 Debtor not traced - subsequent debtor contact

When the trustee has not applied for their discharge and they ascertain the whereabouts of the debtor, or the debtor makes contact with the trustee, they can subsequently prepare a report to discharge the debtor in accordance with Section 143(3) and (4) of the Act.

This report cannot be made earlier than 12 months from the date the whereabouts of the debtor were ascertained, or from when the debtor made contact with the trustee.

The trustee should follow the procedure shown at section 14.1.

14.2.7 Subsequent debtor contact - review and appeal

An application can be made by the debtor or trustee to the Accountant’s independent review team for a review of a decision made by the Accountant to refuse to discharge the debtor.

An application can be made by any creditor to the Accountant’s independent review team for a review of a decision made by the Accountant to grant discharge the debtor. In this circumstance the decision to discharge the debtor will be put on hold until the outcome of the review is decided.

An application must be received before the expiry of 14 days from the date the decision was made by the Accountant.

When an application for review is received the decision to discharge the debtor is put on hold until the review decision is made.

The team must take into consideration any submissions made by any interested party before the expiry of 21 days from the date the application.

The outcome of the review to confirm, revoke or amend the decision, determination or requirement must be made before the expiry of 28 days from the date the application for review was made.

Any person entitled to request a review may appeal the review decision to the sheriff before the expiry of 14 days from the date the review decision, determination or requirement was made.

The sheriff’s decision is final.