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

This guidance describes the general functions of Accountant in Bankruptcy, interim trustees, trustees and commissioners in relation to their responsibilities regarding bankruptcies which started on or after 30 November 2016.

8.5 Deductions from debtor’s earnings and other income

The debtor may choose to make payments from earnings, or other income, directly from a third person who is due to make the payment to the debtor.

A third person may be:

  • a person by whom the debtor is employed
  • a person who is required to pay the earnings or income to the debtor
  • a person who is required to pay the income to the debtor

8.5.1 Actions of the debtor

The debtor must provide the third person a Form 19 of The Regulations, with an instruction to:

  • deduct a specified amount from their earnings or other income
  • make payments of this amount to the trustee

8.5.2 Actions of the trustee

The trustee may give a third person a Form 20 of The Regulations, (see section 1.5) if:

  • the debtor fails comply with the requirements to provide a Form 19
  • the debtor fails to make two payments towards the DCO

8.5.3 Actions of the third person

Upon delivery the recipient of the instruction must:

  • deduct the sum specified in the instruction on every pay day, or day on which the payment is due
  • pay the sum to the trustee as soon as reasonably practicable

The third person may charge a fee, equivalent to the fee chargeable under section 71 of the Debtors (Scotland) Act 1987, from the balance due to the debtor.

When the third person fails, without good cause, to make the payment they are:

  • liable to make the payment on demand by the trustee
  • not entitled to recover the amount from the debtor
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