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

If the trustee is satisfied that the debtor has met their obligations in terms of their PTD, and they have co-operated in full with the trustee, an application for the debtor’s discharge, Form 5 in the Schedule to the Protected Trust Deeds (Forms) (Scotland) Regulations 2016, should be completed by the trustee and sent to AiB for approval after any notice of inhibition has been recalled or expired. 

If AiB is satisfied that the debtor has met their obligations and cooperated, on receipt of Form 5, the debtor’s discharge will be recorded in the ROI and the date of their discharge will be the date the entry is made in the ROI.

AiB will, without delay, notify the trustee that the debtor has been discharged and provide the date of discharge.  The trustee must notify the debtor and every known creditor, of the date the debtor has been discharged.

Section 184(8) of the Act sets out the process by which a trustee may refuse the discharge of a debtor.  It is clear that, in many cases, the agreed payments will not be complete within a period of 48 months commencing with the granting of the trust deed as there will be a delay before payments commence.  In these circumstances there is no requirement for the trustee to formally advise of refusal of discharge at this stage as per the procedures set out at Section 184(8).

The Accountant may refuse to register a Form 5 in the register of insolvencies if the Accountant is not satisfied that the debtor has not met their obligations in terms of the PTD or co-operated with the administration of the trust. Section 184(9) of the Act refers.

AiB will refuse to register the discharge of a debtor if it is not satisfied that, for example:

• the debtor has co-operated during the lifetime of the PTD and this has impacted on the final dividend return to creditors
• the debtor has made full declaration of their assets and income
• the debtor has paid the appropriate amount and number of contributions
• the trustee has realised sufficient funds from the debtor’s assets and additional work is still required that requires the debtor’s cooperation

This list is not exhaustive.

AiB will notify the trustee and the debtor in writing if it refuses to discharge the debtor and give the reason(s) for this. AiB may also issue a direction to the trustee, to direct him how to act, if it is felt additional work is still required before the debtor can be discharged.

The trustee must send a copy of AiB’s notification to all known creditors, no later than 7 days after receipt of the notification from AiB.

If the issues that have been identified in AiB’s decision not to discharge the debtor can be addressed, a further Form 5 application may be re-submitted to AiB.

If any party is unhappy with the decision of AiB to refuse to register the discharge of the debtor in the ROI, they may appeal this decision to a sheriff within 21 days of the decision being made. 

The decision of the sheriff on an appeal is final.