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

This guidance describes the general functions of Accountant in Bankruptcy and trustees in relation to their responsibilities regarding protected trust deeds (PTDs) which were granted on or after 30 November 2016


3.2 Documents to be sent to creditors

Not later than seven days after the publication of the notice in the ROI, the trustee must send the following documents to every known creditor, other than a secured creditor who has consented in terms of section 166(2)(c) of the 2016 Act to enable the creditor to submit a claim:

  • a copy of the trust deed
  • a copy of the ROI notice
  • a Form 2, as recorded in the Protected Trust Deeds (Forms) (Scotland) Regulations 2016

A statement of the debtor’s affairs which must contain the following:

  • a list of the debtor’s assets and liabilities
  • a statement of the debtor’s income and expenditure, at the date the trust deed was granted, in the style and format of the Common Financial Statement
  • a statement as to the extent of any of the debtor’s assets or income which are not conveyed to the trustee and are therefore, excluded from the PTD
  • the number and value of contributions expected from the debtor
  • a statement about the EC Regulation (see section 1.7)
  • a statement whether the creditors are expected to receive a dividend, and if they are, the expected amount of dividend to be paid
  • where applicable, the effect of any exclusion of the dwelling house may have on the dividend they may receive
  • the rights of the creditor to see copies of valuations held by the trustee which relate to an asset of the debtor and statements showing the amount(s) owed by the debtor under a security and documents recording the income of the debtor
  • a copy of any agreement on heritage, Form 1B
  • an explanation of the pre-conditions of protection
  • an explanation of the consequences of protection
  • details of any PTD under which, in the 6 months preceding publication of the notice in the Register of Insolvencies, the debtor has been discharged or refused a letter of discharge in terms of section 184(1) or (8)of the 2016 Act
  • where a secured creditor’s consent has been obtained in terms of section 166(2)(c) of the 2016 Act , a statement containing a valuation made by a third party of the debtor’s dwelling house (or part thereof) which is excluded from the trust deed and the amount of the debt owed, in respect of the security
  • a statement in Part 1 of Form 3, as recorded in the Protected Trust Deeds (Forms) (Scotland) Regulations 2016, detailing the trustee’s anticipated realisations from the PTD

Creditors must be provided with an explicit assessment of each debtor’s income and expenditure and the resultant contribution, even where the overall household position has been considered. This will ensure that the trust deed was only granted for a single estate and based on a debtor’s income and expenditure. The Accountant will require this evidence held by the trustee to verify the income or expenditure, when considering whether to grant protection.

This does not prevent creditors from being presented with a full picture of household income and expenditure where this is necessary. These situations can be particularly complex and in certain circumstances, the rationale for assessing an individual’s income and expenditure can be illustrated most appropriately in the context of the overall household situation. 

However, if the trustee does not present creditors with an accurate calculation of the debtor’s individual financial status, the trust deed will not have met the condition of section 170 of the 2016 Act and may therefore, not be protected and registered in the ROI.

There is no statutory form of statement of affairs and trustees are free to use such format as seems best to them. 

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