Discharge of the trustee

Once the final distribution of the trust deed has been made, and the client has been discharged or refused discharge, the trustee can apply to the creditors and the AiB for their own discharge. This ends the trust deed.

Details of the discharge process for client and trustee can be found in section 186 of the Act and section 10 of the PTD.

The trustee is required to seek their discharge from creditors within 28 days of the final distribution under the PTD.

The trustee applies to the creditors and the AiB using Form 6 in the Protected Trust Deeds (Forms) (Scotland) Regulations 2016. The final distribution date is considered to be the date the estate is no longer under the control of the trustee.

The trustee’s discharge depends on the consent (actual and deemed) of a majority in value of creditors within 14 days of the issue of Form 6.

A creditor who does not respond to the form within 14 days from the date it is issued is deemed to consent to the trustee’s discharge.

The discharge of the trustee releases them from any liability to the creditors in respect of any act or omission in exercising the functions conferred on them by the Bankruptcy (Scotland) Act 1985 and the Bankruptcy (Scotland) Act 2016, except for a liability arising from fraud.

If the creditors refuse to discharge the trustee, the trustee has a right of appeal to a sheriff.

Within 28 days of the discharge of the trustee, the trustee sends a statement to the AiB in Form 7 and the AiB will record this in the Register of Insolvencies. This brings the protected trust deed to an end.