Scottish and English debt laws are different, so if you are a Scottish resident and have questions on debt, then this is the place to post.

Moderators: TalbotWoods, JaneClack

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By TalbotWoods
#191489 THIS APPLIES TO SCOTLAND ONLY

A debtor who wishes to make themselves bankrupt no longer has to go to court. All debtor applications must be sent to and decided by the Accountant in Bankruptcy.

A debtor must owe a minimum of £1,500 before they can apply for their own bankruptcy. If a creditor wishes to make a debtor bankrupt they must show to the court that the debtor owes a minimum of £3,000.

The Court of Session no longer awards or recalls bankruptcies. All creditor petitions and recalls must be submitted to sheriff courts.

A sheriff will be allowed to delay their decision on a creditor's petition for bankruptcy to give a debtor time to agree a payment plan that will remove the need for them to be made bankrupt.

A new route into bankruptcy has been introduced for people on low income who do not own property and have very little in savings or other assets. This is known as Low Income Low Assets (LILA).

The period of a debtor's bankruptcy has been reduced from three years to one. However, this can be extended if someone does not co-operate with their trustee or misbehaves whilst bankrupt. The trustee, as under the previous rules, does not get their discharge until the administration of the case is complete.

If a debtor does not co-operate with their trustee or misbehaves before and/or during their bankruptcy, they may be made subject to a Bankruptcy Restriction Order or a Bankruptcy Restriction Undertaking (BRO/BRUs). BRO/BRUs apply restrictions to a debtor's credit and work activities for between 2 and 15 years after the BRO/BRU is granted. Details of a debtor's BRO/BRU will be recorded on the Register of Insolvencies.

The process for obtaining contributions from a debtor's income during their bankruptcy has been formalised with the introduction of new Income Payment Agreements and Orders (IPA/IPOs). Agreements and orders will normally last for three years from the signing of the IPA/IPO.

Student loans will not be written off through bankruptcy.

A debtor will only be allowed to appeal the amounts declared in the accounts of their trustee if they can demonstrate they will gain financially from the outcome of the appeal.

There are also changes to the responsibilities of the interim trustee and trustee appointed to administer the debtors' financial affairs before and during bankruptcy.

For further information please go to http://www.aib.gov.uk/guidance/publicat ... ostapril08

Tim
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By TalbotWoods
#191492 Would members of the forum, who wish to know more about these changes, please refer to and read the information on the Accounts in Bankruptcy site FIRST.

This is a completely new set of laws, which will take time for the 'learned' advisers on here to get to grips with.

However, if after you have read the AIB information you have questions, please feel free to ask them in the Scotland Section, but allow the advisers times to answer as they may need to seek guidance themselves before giving you an answer.

The link to the AIB site is:

http://www.aib.gov.uk/

Tim
By squeek2211
#243035 I was under the impression that your BR ran for 1 year when you were discharged by AIB but you could possibly be asked to make payments towards it for three years, is that not the case now? Certainly on my letter I am to be discharged a year after becoming BR, can you advise me?
By squeek2211
#243045 I think I may have misunderstood the question, should have read it better! but I found the answer to mine, I started to panic thinking it lasted for 3 years!

If a debtor applies for their own bankruptcy, they will normally be discharged one year after the date the bankruptcy was awarded. If a creditor petitioned for the bankruptcy, discharge will be one year after the date that the court issued the warrant citing the debtor to appear at a hearing. However, if a debtor does not co-operate with the trustee, the trustee can ask the sheriff to delay the discharge by up to two years at a time.

The debtor will not be formally notified that the bankruptcy has been discharged. However they can, if they wish, ask the Accountant in Bankruptcy for a certificate of discharge. There will normally be a charge for this.

Even though a debtor has been discharged, the bankruptcy will not be finished until the trustee has done everything they need to, and they are discharged from their duties. The debtor must co-operate with the trustee until the trustee is discharged.

The debtor will be notified of the trustee's application for discharge.
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By TalbotWoods
#243075 Not quite Squeek, tetleypish was bankrupt under the OLD rules, not the current rules, so the term for his bankruptcy was three years (Old Rules) and yours is one year (New Rules)

So if you had entered into bankruptcy prior to 1st April 2008 (Say 31st March 2008), then you would not have been discharged until 31st March 2011. If you entered into bankruptcy post 1st April 2008, (Say 2nd April 2008) you would have been discharged 2nd April 2009.

Tim