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

Creditors should submit claims on Form 2 of the Protected Trust Deeds (Forms) (Scotland) Regulations 2016. The trustee should encourage known creditors to claim and where necessary issue a reminder in respect of outstanding claims. However, it is the creditor’s responsibility to submit a claim.

The trustee will be required to adjudicate on all creditors’ claims prior to payment of an interim or final dividend.  Trustees can apply some discretion when accepting creditor claims. The Accountant considers it reasonable to accept claims where the sum claimed is within a 10% tolerance of that included in the documentary evidence provided.

When a local authority makes a claim for unpaid council tax, the trustee should confirm the period for which the unpaid council tax is due.

A full year’s council tax is payable from the start date of the council tax year. Therefore, a local authority may submit a claim for a full year’s council tax amount, regardless if the debtor was made bankrupt before the end of the council tax year.

A debtor may pay their council tax liability for a period included in the local authority’s claim. If this is the case, the local authority should revise their claim down accordingly, prior to the trustee’s adjudication and distribution. Trustees should be aware that a reduction may be required to a local authority’s claim, prior to adjudication.

If a local authority has submitted a claim for a whole council tax year, this should remove the requirement for the debtor to pay council tax for that year. However, some local authorities do expect the debtor to continue to pay their council tax, regardless if a payment period is included in their claim. The trustee should establish if this is the case. If council tax does not have to be paid by the debtor at any time during their bankruptcy, the trustee should review the debtor’s contribution calculation, as non-payment of council tax may increase the debtor’s surplus income from which a larger contribution can be paid.