Notes for Guidance - Protected Trust Deeds - Bankruptcy (Scotland) Act 2016

If a debtor fails to pay two consecutive contribution payments to their trustee from their income, the trustee can request that the debtor instructs their employer to pay the required contribution payments from the debtor’s earnings, direct to the trustee.

The debtor will give this instruction to their employer using Form 4A, as recorded in the Schedule to the Protected Trust Deeds (Forms) (Scotland) Regulations 2016. 

If a debtor refuses to complete Form 4A, the trustee may direct the debtor’s employer to pay the required contribution payments from the debtor’s earnings, direct to him. The trustee will give this instruction to the employer using Form 4B, as recorded in the Schedule to the Protected Trust Deeds (Forms) (Scotland) Regulations 2016. 

If, at any time, the amount of the contributions paid direct by the employer to the trustee is to be varied, only the debtor may instruct the employer to vary the amount using Form 4C, as recorded in the Schedule to the Protected Trust Deeds (Forms) (Scotland) Regulations 2016. 

If the debtor refuses to complete and submit Form 4C to his employer, the trustee must consider if this non-cooperation is sufficient grounds to end the PTD and either, not discharge the debtor and/or submit a petition for the debtor’s bankruptcy.

Where an employer, without good cause, fails to make a payment due under an instruction the employer will be liable to pay the amount that should have been paid, direct to the trustee and he will not be entitled to recover these funds from the debtor.

The employer may charge a fee for making payments from the debtor’s income to the trustee. The fee can be deducted from the balance of earnings due to the debtor, post payment of the contribution to the trustee. The amount of the fee can be the equivalent to the fee chargeable under the terms of section 71 of the Debtors (Scotland) Act 1987.

The trustee must, without delay, notify the employer in writing, if the instruction to pay is to be recalled and specify when the last contribution should be paid to the trustee.