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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

9.5 Trustee's refusal to discharge the debtor

As the debtor’s discharge is conditional, the trustee may decide discharge is inappropriate if the debtor has unreasonably failed to comply with the terms of the trust deed or does not co-operate with the trustee.

If on request of the debtor, or at any time should the trustee consider that the debtor has failed to meet their obligations and not co-operated with the administration of trust deed, the trustee must as soon as reasonably practicable apply to AiB for agreement to refuse the debtor’s discharge.

The trustee must set out the reasons for their decision on the Form 5A for AiB to consider the refusal. This form is required in advance of any Form 6 applications to AiB, irrespective of the date on which the trust deed was granted.

Should AiB agree that the debtor should not be discharged, a notification will be sent to the trustee as soon as reasonably practicable.

On receipt of notification from the AiB, the trustee must inform the debtor in writing within 7 days and state:

  • the reasons why they do not consider discharge appropriate
  • that the debtor is not discharged from their debts
  • the debtor’s right to appeal to the Sheriff

A copy of this letter should be sent to AiB no later than 21 days after the trustee has issued their notification.

If the trustee refuses to discharge the debtor, the debtor is not discharged from their debts and creditors are free to enforce debt recovery action.

The trustee may still seek his own discharge from the creditors where the debtor discharge has been refused. It is good practice for the trustee to notify the creditors if the debtor is not to be discharged.

Should AiB disagree with the trustee’s decision, the trustee will be contacted in the first instance to discuss matters.  Where the trustee and AiB do not agree, the AiB will issue a direction to the trustee which can then be challenged by submitting an appeal to the sheriff. 

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