What Scottish individuals need to know about diligence and debts

Diligence is the technical term for enforcement and comes in many forms. Diligence can only be used following court action and is therefore the result of a lengthy recovery campaign on the part of the creditor.

Before any type of diligence can be actioned, creditors must have formally requested payment in writing; this is known as a ‘charge for payment’. This must state the amount you must pay and give you a deadline to make this payment, which is usually 14 days from the date of the letter. It is only once this request has been issued and the deadline has passed without payment that diligence can be carried out.

Diligence is a wide ranging term and covers a variety of various actions a creditor can take to recover the money they are owed. The seven main forms of diligence are as follows:

• Diligence on the dependence – This is typically used at the start of, or during, court proceedings while creditors are waiting for a decision to be made. This order protects creditors during this interim period by imposing some limitations on what a debtor can do with their property and other valuable assets. This is sometimes referred to as a provisional order in certain circumstances.

• Money attachment – This allows a sheriff officer to seize money or cheques. This does not include cash which you have in your home, and is therefore typically only used if you own and run a business who deals mainly in cash payments. Money attachment will also only be used if a bank arrestment is not possible.
• Exceptional attachment order (EAO) – This is more serious than a standard attachment of property order, as an EAO allows the sheriff officer to enter your home and seize any valuable goods they find. They are able to open and enter closed and/or locked places; however, they are not able to force entry into your home. As with an attachment order, certain items including basic household goods cannot be taken from you.
• Inhibition – This type of order prevents you from selling your house, business premises, land, or any other form of property that you own. It also prevents you from raising additional borrowing on your home, e.g. through remortgaging. A standard inhibition order will last for five years, although this can be extended or renewed once this period has run out. If you do want to sell your home whilst under an inhibition order you will be required to pay your creditor the money you owe with the proceeds of any such sale. If you are in this situation, you will need to take advice from a solicitor to ensure you are acting within the terms of your inhibition order.

If any type of diligence has been issued against you, you need to take action as a matter of urgency. You may be able to negotiate a payment plan which, as long as you stick to it, will halt any further action being taken and will ease the restrictions imposed on you. In order to do this you will need to fill out a Time to Pay application form and send this directly to the court.

You may also be able to enter into a voluntary debt management scheme such as a Debt Arrangement Scheme (DAS). This will involve you making a monthly payment to your creditors and protect you from any form of diligence being used against you.

If you are struggling with debt and would like some advice about what to do next, contact the specialists at Scotland Debt Solutions. We help hundreds of Scots every year to get their finances back on track and look towards a future free from debt. Based across five offices across Scotland, we know exactly what options are available to indebted individuals in Scotland, some of which may not exist elsewhere in the UK. This specialist knowledge means we can provide you with the very best help and advice regardless of your situation. Call us today on 0800 063 9250 to find out more.