Debtor's Responsibilities

Main legal responsibilities of debtors

This note summarises the main legal responsibilities of debtors. These are things that a debtor must do when a Court has decided that they are bankrupt. A debtor has to do these things even if they disagree with the Court’s decision and intend to challenge it. These responsibilities are set out in the Bankruptcy (Scotland) Act 1985 as amended.

This note is for general guidance only. It is not a detailed or full statement of the law.

In cases where the Accountant in Bankruptcy (AiB) is appointed Trustee, she may appoint an agent to do some of her work. If AiB appoints an agent, debtors have the same responsibilities to the agent as to AiB.

• Responsibilities of debtors
• Further information

back to top

Responsibilities of debtors

1. A debtor must give the Trustee a contact address so that information and instructions about their bankruptcy can be sent to them.
2. A debtor must complete a statement of their assets and liabilities. This means filling in a questionnaire about each debt, and their money and property. The statement must be signed to confirm that it is correct and complete. The completed statement must be returned to the Trustee within seven days. AiB has produced a leaflet “Completing the Statement of Assets and Liabilities”. Please ask for a copy of this leaflet if you would like more information about this responsibility.
3. A debtor may have to hand over money or valuables. He or she may also have to hand over any paperwork about finances. If the debtor ran a business, they must hand over any paperwork about that. If the business dealt in perishable goods these may have to be handed over also. AiB has produced a leaflet which explains how this can affect a debtor’s home. Please ask for a copy of leaflet “What happens to my home?” if you want more information about this.
4. A Trustee can ask a debtor and their husband or wife to come to a meeting and answer questions. A debtor and their husband or wife should cooperate with a request to come to a meeting and answer questions. If necessary, Trustees can ask the Sheriff to order an examination under oath of a debtor and their husband or wife at the Sheriff Court.
5. A debtor must tell the Trustee if their financial circumstances change while they are bankrupt. They have to tell the Trustee if they inherit or win any money or property.
6. A debtor cannot give away their property or sell it for less than it is worth to someone who would normally have paid full price for it.
7. A debtor cannot pay just one of their debts if that would be unfair to anyone else they owe money to.
8. A debtor must cooperate with the Trustee and must not be obstructive.
9. A debtor must not tell the Trustee anything that they know is untrue. They must not change any paperwork, and if they know someone else has changed it they must tell the Trustee. They must not destroy or damage any of their property or any of their paperwork. They must not hide it or take it out of Scotland.

It is important that debtors understand their responsibilities. A debtor may have to go to the Sheriff Court if they ignore their legal responsibilities. The Sheriff can order them to meet their responsibilities. The Sheriff can impose fines and prison sentences for failure to obey a court order or for failing to meet some responsibilities.

The Trustee can also apply to the Sheriff to defer a debtor’s discharge from bankruptcy if they have not cooperated with their responsibilities.

back to top

Further Information

Further information may be obtained from us at:

Accountant in Bankruptcy
PO Box 8313
Irvine
KA12 2AA
LP - 4 Irvine
E-mail: helpline@aib.gov.uk
Helpline: 0845 7626171
Phone: 0845 6126 460
Fax: 0845 6126 470
(calls charged at local rates)

Disclaimer:

The information given on this page is for general guidance only. It is not a detailed or full statement of law.

© Accountant in Bankruptcy - Updated December 2004