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

On receipt of application the BAI team will:

• review the information and evidence provided
• request further information as required
• consider if the investigation can be completed within the timescale available
• apply the Public Interest Test
• make a decision to accept or reject the application
• when an application is rejected reasons will be provided

16.6.1 Investigation process

The BAI team will in-gather sufficient information and evidence to effectively support or reject, the requirement to impose a BRO on an individual.

The BAI team will undertake this by:

• requesting assistance from the trustee if appropriate
• writing to appropriate individuals or organisations
• interviewing the debtor to allow them to present any relevant information and/or evidence
• considering the information in-gathered against the Public Interest Test
• if appropriate, considering the period the restrictions should be imposed for
• making a decision to:
  • take no further action
  • request the Accountant impose a BRO (for a period of between two and four years eleven months)
  • make an application to the court to impose a BRO (for a period of five years or over)

16.6.2 Period of restrictions

The BAI team will assess the misbehaviour of the debtor and consider the severity of the behaviour to determine the period they believe is appropriate and can be justified to the Accountant or the sheriff.

Each individual case must be treated on its own merits. This Guidance has divided the 15 year period into three groups:

Period of 2-5 years

• cases which are not relatively serious
• debtors who have over-reached – going beyond the point when they should have realised they were likely to become bankrupt
• debtors who are careless rather than overtly reckless
• consumer credit cases, unless there is reason for them to move into the middle bracket
• cases involving small amounts of debt (less than £5,000), even though there has been recklessness by the debtor

Period of 6-10 years

• cases when there is a cynical exploitation of creditors (may be overt or implied by timing of events and may include actual or potential criminal acts)
• cases when there is overt recklessness or a blatant disregard for creditors resulting in substantial/material detriment
• the debtor does something to put substantial/material assets out of reach of creditors

Period of 11-15 years

• particularly serious cases
• cases of very substantial fraud or dishonesty, involving material sums (more than £50,000)
• cases when there has been a breach of a previous BRO