Support for mortgage interest Expand If you receive certain benefits and are a homeowner, you might be able to get a loan from the government to help pay the interest on your mortgage. This is called Support for Mortgage Interest. For more information, visit the UK government's website.
Sheriff officer Expand A Sheriff Officer is an officer of the court whose job is to enforce court orders that relate to debt.
Protected trust deed Expand In a Protected Trust Deed you normally make reduced payments over four years, after which any remaining debt is usually written off. A trust deed can become protected if the majority of creditors agree to its terms. This means that creditors can’t take action to recover the money you owe or to make you bankrupt. Your assets and financial affairs will be looked after by a trustee for the duration of the protected trust deed.
Mortgage repossession Expand Your mortgage lender may take court action to repossess your home if you have not been able to pay your mortgage. If this happens, you should get help from an adviser as you may be able to come to an agreement with your lender.
Money adviser Expand A money adviser is a professional who helps individuals put a plan in place to manage/repay their debt. They will help you determine the best debt relief option for you by reviewing your financial situation, assessing your suitability for each and explaining the benefits and drawbacks allowing you to make an informed decision. Your money adviser will be your point of contact when you enter into a debt solution.
Minimal asset process (MAP) bankruptcy Expand A MAP bankruptcy is a type of bankruptcy designed for people with low income and little to no assets. To qualify for a MAP, you must not own property and have either been receiving benefits for six months, or have no disposable income. You can only apply for a MAP through an approved money adviser and you can’t have debts of more than £17,000.
Financial Ombudsman Service Expand The Financial Ombudsman Service deals with complaints from consumers on a range of issues including banking, insurance, mortgages, financial advice, and debt collection and repayment. For more information visit The Financial Ombudsman Service's website.
Debt Arrangement Scheme (DAS) Expand DAS is a statutory debt management plan and it is important to note that it is not insolvency. Someone in a DAS will repay their debts over an extended period of time. Through DAS, all interest, fees, and charges are frozen and you are protected from creditors taking any legal action over your debt. Your money adviser will be able to determine if DAS is the right option for you.
Debt and information package Expand If a creditor is taking action or about to take action, you will receive a debt advice and information package. This will normally come with notification of what action the creditor intends to take. The pack will explain the different ways a creditor can take action and will provide you with information on where to go for debt advice.
Council tax Expand Council tax is a tax on domestic property and is collected by local authorities. Some people are exempt from council tax or can get a discount. To find out if you qualify for an exemption or discount, use our online calculator. Council tax debt is one of the most common types of debt.
Charge for payment Expand A charge for payment of money (or charge to pay) is the final notice from a creditor and gives you 14 days to pay before they will take legal action. If you have received one of these you should get debt advice as soon as possible
Bankruptcy Expand Bankruptcy in Scotland is known as sequestration. This is a form of insolvency which is generally only used as a last resort when someone is unable to pay their debts. A person can enter into sequestration voluntarily or because a creditor has initiated the process. A creditor(s) has to be owed a least £3,000 before they can sequestrate someone.
Assets Expand Your assets are things that you own such as your home, car, and money tied up in things like investments or equity in your home. In some circumstances it can help to clear your debt by selling assets, and some debt solutions may require that you do this. However, this will be assessed on an individual basis and your money adviser will be able to provide more information.
Arrestment (earnings) Expand Earnings arrestment is used to make a deduction from your earnings for enforcement of a debt.
Arrestment Expand Arrestment is when a creditor stops you taking money from your bank accounts by freezing them. This can only happen if the creditor has been through the correct legal process and there are strict rules in place about how this is done.
Accountant in Bankruptcy Expand The Accountant in Bankruptcy (AiB) is a government agency and is responsible for administering and overseeing all bankruptcies and insolvencies in Scotland.
Write-off Expand Requesting a write-off could be viewed as an option of last resort. It usually means that the client has no available income or assets, is not a homeowner and the debts are relatively small. It may also mean that the client is on low or benefit income and the circumstances are unlikely to change in the foreseeable future. A write-off means the creditor/s agree not to collect any further payments and remove the account from their records. A creditor’s agreement to write-off should always be confirmed in writing as this can be produced in the future should any disagreement arise. Most creditors will not readily agree to a write-off particularly if the debt is recent or large and the client may have to consider an alternative strategy (e.g. token payments).
Warrant to cite Expand The warrant to cite is the first order granted by the court authorising the petitioning creditor/s to cite the debtor to appear in court on the date stated to show cause why sequestration should not be awarded.
Unfair relationships Expand The Consumer Credit Act 2006 (Sections 140A to 140C) introduced the concept of an “Unfair relationship” between a borrower and a creditor. This enables a borrower to challenge a credit agreement in court on the grounds that the relationship between the lender and the borrower in connection with the agreement is unfair to the borrower. This provision is in addition to an enhanced ability for consumers to take disputes to the Financial Ombudsman Service (FOS). Unfairness is not defined and the test will cover all aspects of the creditor/debtor relationship both before and after an agreement is made, as well as the terms of the agreement. The unfair relationships test does not cover FCA regulated mortgages or hire agreements. If a court finds a relationship to be unfair to a debtor, it can: Order the creditor to repay money to the debtor Order the creditor to do or not do anything Order the creditor to reduce or discharge any amount payable by the debtor Order the creditor to return any property to the debtor Amend the terms of the agreement, for example by reducing the rate of interest. The borrower would need to raise the action in their local sheriff court and as there is no formal form they would have to use the Summary Application Procedure which does not allow for lay representation. An alternative would be for the borrower to ask the sheriff to consider if the agreement was unfair when the creditor raises an action.
Token payments Expand Some debtors are not comfortable asking creditors to write-off a debt completely as they wish to even make a small or token payment to the creditors. This type of offer is normally made when there is an unexpected drop in a debtor’s income but it is expected to be short term. Debtors could offer say £1 or £2 per month as a goodwill gesture and as an acknowledgement that they owe the debt but are unable to meet their commitment in the short term. There is no guarantee that creditors will accept token payments and it is only an option that may be considered. If the situation looks long term, it may be better to consider other options. (e.g. bankruptcy/write-off).
Time to pay orders Expand An application form for the TTPO (FORM 2) can be obtained from the local sheriff court. The debtor can either make application in writing or attend court personally (lay representatives are permitted), and they can offer payments by instalments or as a lump sum. The sheriff will then grant an interim order temporarily preventing the creditor from completing the diligence. The creditor then has fourteen days to object to the payment offer made by the debtor. If the creditor makes no objection to the TTPO, it will be granted in favour of the debtor. However, if there is an objection, the sheriff clerk will set a date for a hearing where the sheriff will decide the outcome. This is effectively another diligence stopper. (Lay representation is allowed). NOTE: Time to pay applications under The Simple Procedure are known as a 'Time to Pay Application' and the one form (Form 5A) is used throughout the process, before and after the sheriff's decision. The Ordinary Cause Procedure still uses two forms; one before and one after decree, as above.
Time to pay directions Expand An application form for the TTPD is included with the summons. The debtor can either make application in writing or attend court personally (lay representatives are permitted), and they can offer payments by instalments or as a lump sum. The creditor can reject the offer, and they must send a copy of the rejection minute to the debtor. The final decision will lie with the sheriff. The length of the proposed payment timescale will be a major factor in the decision. If the offer is accepted, the creditor can take no further action (this is effectively a diligence stopper). If a debtor misses two payments, on the date the third payment becomes due, the time to pay direction collapses and the creditor can then begin to enforce payment.
Time orders Expand If the debtor is finding it difficult to meet the scheduled payments in a “regulated” consumer credit agreement, Section 129 of the Consumer Credit Act 1974 allows for the application of a Time Order. This is a way of asking the court to allow more time to make payments under the agreement. Time orders can be applied for before, during and after court action but the simplest way to apply is to use the form that is contained in the summons. An application for a time order cannot be granted if a Time to Pay Direction (TTPD) or Order has already been granted (in terms of the Debtors (Scotland) Act 1987) in relation to the same debt. There have been very few time orders awarded in Scotland and if the debt is not secured or hire purchase it may be better to use a TTPD.
Support for mortgage interest (SMI) Expand From 6 April 2018, Support for Mortgage Interest (SMI) will be paid as a loan - which must be repaid when the claimant dies or sells their home. Before this date, SMI was paid as a benefit, which claimants did not have to repay. The amount that a claimaint may have already received as a benefit does not need to be repaid.