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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

9.1 Discharge is conditional

Discharge of the debtor is not automatic. Section 184 of the Act allows the trustee to apply to AiB for the debtor to be discharged from their debts, if the trustee is satisfied that, to the best of their knowledge, the debtor has met their obligations under the PTD and the debtor has co-operated during the administration of the PTD.

A PTD is a voluntary arrangement and a debtor is expected to comply with the terms of that arrangement, to provide information about assets and liabilities, income and expenditure, to cooperate in the realisation of their estate and to pay contributions. A debtor who unreasonably fails to comply, or does not co-operate with the trustee, has not kept to the agreement and should not have the benefit of imposing that agreement on creditors. 

A debtor is not considered to have failed to meet their obligations if they refuse to consent to the sale of the dwelling-house which is excluded from a trust deed in accordance with section 228(1) of the 2016 Act or refuse to give a relevant consent in terms of section 113(1)(a) of the 2016 Act.

It would not be appropriate to refuse to discharge a debtor because of circumstances beyond their control, such as:

  • a change of circumstances which prevents them from paying any contribution payable under section 168 of the 2016 Act
  • any extenuating circumstances which may prevent the debtor from continuing to meet their obligations and there is no reasonable prospect of the debtor being able to resume meeting their obligations under the trust deed
  • if an asset realises an amount less than originally estimated by the trustee on Form 3

The trustee is entitled to charge a reasonable fee for a letter of discharge which is chargeable against the debtor’s estate. 

A reasonable fee means a fee which the trustee would normally charge for the issue of a letter or a fee equivalent to the AiB fee for a certificate of discharge under bankruptcy.

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