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

If, on request of the debtor, or at the end of the 48 month payment period, beginning with the day on which the trust deed was granted, the trustee considers that a Form 5 application for discharge is not appropriate, the trustee must inform the debtor in writing 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 the trustee’s decision

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 not bound by the PTD.

The trustee may still seek his own discharge from the creditors even if they refuse to discharge the debtor. It is good practice for the trustee to notify the creditors if the debtor is not to be discharged.

PTD Protocol administration

Where a trustee is at the stage of issuing a debtor notification under Section 184(8), before issuing the notice, the trustee must first submit to AiB the Refusal of Debtor Discharge document. This document will become a requirement in advance of any Form 6 applications to AiB, irrespective of the legislation in effect at the date on which the trust deed was granted.

Before deciding to withhold the debtor’s discharge PTD, the trustee takes several factors into consideration, as the implications on the debtor are significant. The trustee is therefore being asked to articulate the reasons for their decision in an agreed format for AiB to consider.

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 seek to issue a direction to the trustee which can then be challenged.  Hereafter, in terms of Section 184(8) the trustee will send written notification to the debtor.

The protocol preserves the debtor’s right to seek a direction from a sheriff if they do not agree with the intention to withhold their discharge.