The Bankruptcy (Scotland) Act 2016 came into force yesterday, 30 November 2016, together with other consequential amendments and changes to the Court Rules which relate to bankruptcy in Scotland.

The 2016 Act is a consolidation of Scottish Bankruptcy legislation, incorporating all amendments to the Bankruptcy (Scotland) Act 1985, the primary legislation which governed bankruptcy in Scotland. As highlighted by our Rachel Grant, in her Daily Record article in March, this is a much needed piece of legislation. As all practitioners working in insolvency will testify, the Scottish bankruptcy legislation had become somewhat unwieldy following several reforms. In particular, wide-ranging changes were made by way of the Bankruptcy and Debt Advice (Scotland) Act 2014, which came into force on 1 April 2015.

The 2016 Act is only the second consolidation of primary legislation by the Scottish Parliament and it is a welcome one, increasing the accessibility of bankruptcy legislation for all who use or are affected by it.

For those among us working in the insolvency profession, one key point to be aware of is which legislation applies to a particular bankruptcy. The 2016 Act only applies where the bankruptcy petition is presented to Court or the debtor application is made on or after 30 November 2016.

For bankruptcies commencing prior to 30 November 2016, the 1985 Act will continue to apply, however certain of the changes made to the 1985 Act by the 2014 Act will only apply to bankruptcies commencing after 1 April 2015. Therefore, though there has been some welcome consolidation of the bankruptcy legislation, care still needs to be taken to ensure the correct legislation is applied!