Chapter 6: Statutory debt solutions in Scotland1. Introduction2. The Common Financial ToolWhat is the Common Financial ToolCommon Financial Tool for sequestration applicationsHousehold compositionAdult non-dependantsDependent childrenIncomeIncome sources from which a contribution can be takenIncome from which a contribution cannot be takenAssessed contributionAssets generalHeritable property (the client's home)VehiclesInsurance policiesExpenditureEssential expenditureTrigger figure categoriesContingency provision3. The Debt Arrangement SchemeThe parties involvedThe clientThe creditorPayments distributorsThe DAS administratorThe debt adviserPreparing the applicationMoratorium on diligenceEligibility for a debt payment programmeJoint applicationsPreparation for an application for a DPPThe applicationThe request to creditors to consent to the DPP applicationRejection of a DPP proposalThe effect of approval of a DPP on the clientThe effect of approval of a DPP on creditorsAdministration process following approval of the DPPAdministering a DPPGeneralApplication for a variationDAS administrator to apply for a variationNotification of a variationRevocation of a DPPApplication for revocationDetermination of a revocationRevocation of a joint DPPCompletion of a DPPComposition4. The Minimal Asset ProcessWhat is the Minimal Asset ProcessQualifying criteriaRoute into a MAPCertificate for SequestrationRevocation or suspension of an approved debt adviserMaking an applicationAppointment of trusteeIncluded and excluded debtsDebt adviceFeesBASYSStatement of undertakings and statement of truthDebtor contribution orderDuration of the bankruptcyDate of sequestrationVesting of the estateNon-payment5. Full Administration BankruptcyWhat is Full Administration BankruptcyQualifying criteriaRoutes into FABApparent insolvencyCertificate for SequestrationMaking an applicationAppointment of trusteeIncluded and excluded debtsDebt adviceFeesBASYSStatement of undertakings and statement of truthDebtor contribution orderDuration of the bankruptcyDate of sequestrationVesting of the estateNon-paymentEvidence and informationChecklist6. Creditor petitions for bankruptcyWhat is a creditor petitions for sequestrationDebt Advice and Information PackageApparent insolvencyCharge for paymentFull Administration Bankruptcy procedureApplication to the court and intimation to the clientWarrant-to-citeCourt hearingCosts and feesConcurrent proceedingsRecallDealing with a creditor petitionDealing with a statutory demandStatutory moratorium on diligenceApplication for a Debt Payment ProgrammeApply for a continuation at courtChecklist7. Protected trust deedsWhat is a trust deedRole of the AiBWho can sign a trust deedPartnershipsConsequencesFeesIncluded and excluded debtsRoutes into a protected trust deedOperation of a trust deedRegistration of the trust deedGaining protected statusCreditor responsesSequestration petition by a qualified creditor to the sheriff courtRegistration for protectionDate of protectionEffect of protected statusUnprotected trust deedsDuration of the trust deedContributionNon-paymentDeductions from the client’s earningsThird-party paymentsExclusion of the family homeDealing with the family home where it is not excluded from the trust deedAgreement where there is little or no equityAppointing your own trusteeTrust deeds contentsTermination provisionsDealing with non-performing trust deedsContinue the trust deed for a longer periodDischarge of the trusteeDischarge of the trustee and the clientDischarge of the clientTrust deed protocolFCA ban on debt packager referral feesTrustee’s refusal to discharge the debtorAiB direction to trusteeCourt directionAppealsDischarge of the trusteeRecallComplaintsChecklist8. Common rules in bankruptcyIncomePensionsChild supportRedundancyCriminal injuries compensationCritical illnessAssetsMoney in bank accountsLife assurance policiesVehiclesThe family homeTenancy agreementsGratuitous alienationUnfair preferenceAcquirendaAssets discovered after the trustee’s dischargeFinancial educationInterest on debtsRecallBankruptcy Restriction OrderRestrictionsNon-complianceExamination of the clientDischarge of the client and the trusteeClient dischargeTrustee dischargeComplaintsDebtor contribution orderCertificate for SequestrationWho cannot be approved debt advisersRevocation or suspension of an approved debt adviserAward by the AiB9. Statutory moratorium on diligenceWhat is a statutory moratoriumWhat can a statutory moratorium doWhat can a statutory moratorium cannot doMaking an applicationPeriod of moratoriumReady reckoner