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

The debtor must provide information about all their assets, irrespective of whether the trustee does not propose to realise an asset. The trustee must ensure that they identify and circularise details about all the debtor’s assets which are conveyed as a result of the trust deed being granted and provide a reason why any asset is not to be realised in full during the administration of the trust deed. 

Debtors should be advised that deliberate misinformation about, or non-disclosure of assets, may be an offence under common law.

It is particularly important to ensure that the debtor fully understands:

• the trustee can seek to realise the full value of any assets which they own
• this includes any equity in the debtor’s family home, unless the dwelling house is excluded under section 228(1) of the 2016 Act (see section 2.9)

The PTD will exclude any assets that would not vest in a trustee in bankruptcy.

The following types of asset are not conveyed to the trustee under a PTD:

• assets which are held on trust for a third party
• assets which are exempt from attachment under the Debt Arrangement and Attachment (Scotland) Act 2002. See section 7.15 of Notes for Guidance - Bankruptcy
• most personal and occupational pension plans. See section 7.7 of Notes for Guidance - Bankruptcy

The insolvency practitioner must record all excluded assets.

When an asset of the debtor is conveyed to the trustee, the trustee must seek to realise the full value of the asset unless the trustee can demonstrate that sufficient funds can be realised from other sources, in order to maximise the dividend payable to creditors.