Bankruptcy and Trust Deed changes on 30 November 2016

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david-menzies By David Menzies, ICAS Director of Insolvency

26 September 2016

Regulations have been laid in the Scottish Parliament which will give effect to bankruptcy changes from 30 November 2016.

Legislation has been laid in the Scottish Parliament which will complete all necessary steps for the Bankruptcy (Scotland) Act 2016 (the 2016 Act) to commence with effect from 30 November 2016.

Following a period of informal consultation on the Regulations carried out by the Accountant in Bankruptcy, a number of changes have been made to the versions of the Regulations which have been laid in Parliament. A significant number of the amendments made are as a direct result of the response submitted by ICAS.

The Accountant in Bankruptcy have indicated that a number of matters raised in the ICAS response will be considered as part of a wider review of the implementation of the Bankruptcy and Debt Advice Scotland Act 2014 in the coming year.

Sequestration

The Bankruptcy (Scotland) Act 2016 (Commencement) Regulations 2016 provide for the commencement of the 2016 Act on 30 November 2016.

The Bankruptcy (Scotland) Regulations 2016 shall apply to sequestrations where the creditor petition for sequestration is presented, or the debtor application for sequestration is received by the Accountant in Bankruptcy (“AiB”), on or after 30 November 2016.

The Regulations have consolidated, with some amendments, provisions of the Bankruptcy (Certificate for Sequestration) (Scotland) Regulations 2010, the Bankruptcy (Scotland) Regulations 2014, the Common Financial Tool etc. (Scotland) Regulations 2014, and the Bankruptcy (Money Advice and Deduction from Income etc.) (Scotland) Regulations 2014. These regulations shall continue to apply for sequestrations where a petition was presented or debtor application made before 30 November 2016.

As well as a number of amendments to statutory forms, the basis of conversion of foreign currency claims has been amended (Reg. 22). The exchange rate used for such conversions will be at an exchange rate determined by the trustee with reference to the exchange rates at the close of business on the date of sequestration. In practice this means that the trustee will be able to set the exchange rate as any reasonable rate readily available to be referenced via the internet and not restricted to rates published in national newspapers.

The Bankruptcy (Applications and Decisions) (Scotland) Regulations 2016 replace and update the Bankruptcy (Applications and Decisions) (Scotland) Regulations 2014 for those sequestrations where a petition for sequestration is presented, or an application is made, on or after 30th November 2016 (and trust deeds for the benefit of creditors executed on or after that date).

Protected Trust Deeds

The Protected Trust Deeds (Scotland) Amendment Regulations 2016 amend Forms 4, 5, 6 and 7 used in relation to protected trust deeds entered into by debtors executed on or after 28th November 2013 but before 30th November 2016 prescribed in the Protected Trust Deeds (Scotland) Regulations 2013 (the 2013 PTD Regulations).  This shall have the effect of bringing the forms into line with the forms for trust deeds executed on or after 30 November 2016 set out in the Protected Trust Deeds (Forms) (Scotland) Regulations 2016.

Provisions contained within the 2013 PTD Regulations (with the exception of prescribed forms) are contained within the 2016 Act in respect of trust deeds signed on or after 30 November 2016 and consequently the 2013 PTD Regulations shall not apply to trust deeds signed on or after that date.

The Protected Trust Deeds (Forms) (Scotland) Regulations 2016 replace (with amendments) the forms to be used in connection with trust deeds signed on or after 30 November 2016.

Legislation

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Topics

  • Insolvency
  • Legislation

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