Accountant in Bankruptcy Expand The Accountant in Bankruptcy (AiB) is an Executive Agency of the Scottish Government under the terms of the Scotland Act 1998. The Agency operates independently and impartially while remaining directly accountable to Scottish Ministers. The Chief Executive is also The Accountant in Bankruptcy (The Accountant), who is an Independent Statutory Officer and an officer of the court appointed under section 1 of the Bankruptcy (Scotland) Act 1985, as amended. The AiB aims to ensure access to fair and just processes of debt relief and debt management for the people of Scotland, which takes account of the rights and interests of those involved.
Adjudication Expand Adjudication for debt is the diligence which creditors may use against specific heritable property of the debtor. A creditor, who has, say, decree for payment, must first raise an action of adjudication in the Court of Session. Decree in that action gives the creditor some rights over the debtor’s property (such as the ability to remove the debtor from possession and to let the property). However, if the debt is not paid off, a 10-year period (the “legal”) must expire before the creditor can take the next step, raising an action for declarator of expiry of the legal. Decree in that action has the effect of transferring ownership of the property to the creditor. The diligence was very little used however it has become more popular in the last few years.
Annual Percentage Rate (APR) Expand The Annual Percentage Rate (of charge) gives the cost of a credit agreement taking account of all the charges made under the agreement. It allows consumers to compare different credit deals and choose the one which suits them best. However, it should be recognised that all types of credit deals are not available to all consumers and some people may find that they have to borrow at very high interest rates in order to obtain credit.
Apparent insolvency Expand Apparent insolvency is a legal term that shows a debtor cannot pay their debts as they become due. There are various ways in which apparent insolvency is triggered however, the most commonly used types of proof are: • The serving of a charge for payment on the debtor• The serving of a statutory demand on the debtor Among the other more remote types of proof are: • A decree of adjudication has been granted• A debt payment programme under DAS has been revoked Apparent insolvency remains in place until either the debtor is discharged or becomes able to pay the debts and does so.
Arrestments Expand This type of arrestment is used on a debtor’s moveable assets which are in the hands of a third party. If the assets were in the debtor’s own hands the diligence of attachment would need to be used. Although it is not exclusively used against money held in banks or building societies this is by far the main type of action for this type of arrestment. Although a creditor could arrest goods that were held in storage by a third party (e.g. furniture). • The creditor is known as the Arrester• The debtor is known as the Common Debtor• The bank or building society is known as the Arrestee The Bankruptcy and Diligence etc (Scotland) Act 2007 has introduced a protected minimum balance (PMB) of funds within a bank or other financial institution that is protected from arrestment. This sum is presently £494.01 provided that the debtor is an individual and the account is not a business or trading account. The arrestment does not automatically transfer money from the debtor’s account to the creditor but freezes the amount above £494.01 and if the debtor refuses to sign a mandate for release the money will be automatically released after 14 weeks. Where funds are attached as a result of the arrestment, the amount arrested is limited to either, the amount the arrestee holds for the debtor or the total amount (including all charges, expenses and interest) due to the creditor, whichever is less. Arrestment of earnings There are three types of diligence that can be used to arrest a debtor’s earnings or wages: 1. Earnings arrestmentEarnings arrestment is used to make a deduction from a debtor's earnings for enforcement of a single debt. A creditor must be in possession of a decree (or relevant document of debt) and must have issued the debtor with a Charge for Payment, which must have expired (14 or 28 days), before proceeding with diligence against earnings. Creditor must provide debtor with a Debt and Information Package (DAIP). This type of arrestment requires the debtor’s employer to deduct sums in accordance with the earnings arrestment tables SSI 2015 No 370-The Diligence against Earnings (Variation) (Scotland) Regulations 2015 which came into force on the 6th April 2016 and pass the deduction to the creditor. 2. Current maintenance arrestmentCurrent maintenance arrestment (CMA) can be used to enforce the payment of maintenance, such as a regular allowance awarded by a court on divorce, when the debtor is in default. A creditor must have a current maintenance order from the court on which the debtor has defaulted and, where the debtor is an individual, the creditor must also have provided them with a DAIP. This type of arrestment requires the debtor’s employer to deduct sums in accordance with the earnings arrestment tables (see earnings arrestment tables) and pass the deduction to the creditor. 3. Conjoined arrestment orderA conjoined arrestment order is an order granted by the court to enforce payment of two or more of the same type of debts, at the same time. For conjoined arrestment orders, the debtor's employer is required to make a deduction and pass it to the court to distribute the funds. The amount deducted is still the same as it would be for a single arrestment only the sum is divided in a pro-rata basis between the conjoined creditors. In all the above diligences the Debt and Information Package (DAIP) must be served on the debtor no earlier than 12 weeks before the arrestment.
Attachments Expand The process of Attachment was introduced by the Debt Arrangement and Attachment (Scotland) Act 2002 (2002 Act). Click here to view act. Note-Amendment to Section 11 (1) (b) “any vehicle, the use of which is so reasonably required by the debtor, not exceeding in value £1,000 or such amount as may be prescribed in regulations made by the Scottish Ministers” Over the years different forms of attachment have been introduced to cope with different circumstances which may arise, the attachments currently in force are: Interim attachment This is a provisional diligence and is basically a “Diligence on the Dependence”. It allows the creditor to attach moveable assets of the debtor before the action has started. The court may, upon application any time after interim attachment, make provision for the security of attached articles. This interim diligence does not allow the creditor to take steps to dispose of the attached items and when a decree is granted, a further valuation and attachment must be carried out before the creditor can proceed to sell attached goods. Interim attachment may not be used to attach the following assets - • Those inside the debtor’s home; • Those which are exempt under section 11 of the 2002 Act Attachment Attachment only applies to assets which are kept out-with the dwellinghouse. This could mean in a garage, on a driveway or in business premises. It allows a creditor to seize a debtor's moveable property as a means of recovering money owed. Unlike arrestment, which is used against property held by a third party, attachment can be used to seize property owned by the debtor and in their possession. Attachment may not be used to attach the following assets: • Those inside the debtor’s home; • Those which are exempt under section 11 of the 2002 Act Exceptional attachment This procedure allows attachment of non-essential assets within the debtor’s dwelling house, but only on application by the creditor and only where the sheriff is satisfied that there are exceptional circumstances. (The list of non-essential assets can be found in Schedule 2 of the 2002 Act). The sheriff will satisfy himself that the creditor has taken reasonable steps to negotiate a settlement of the debt with the debtor. The sheriff will also check that the creditor has already executed or attempted to execute an arrestment and an earnings arrestment and that there is a reasonable prospect that any sums recovered through exceptional attachment would produce the aggregate of chargeable expenses and £100. Under an exceptional attachment articles may be removed immediately unless it is impractical to do so. Money attachment Money attachment is permitted to enforce payment of a debt only if the creditor holds a court decree or other and has served a charge for payment on the debtor Where the debtor is an individual, the creditor has, no earlier than 12 weeks before executing the money attachment, provided the debtor with a debt advice and information package. Money in a dwellinghouse cannot be attached. Money means cash (sterling and other currencies), cheques, negotiable instruments, promissory notes, money orders and postal orders. It is thought that the main areas where money attachment will be used is in places where cash changes hands, such as in shops, public houses and places of entertainment. There are certain days and times when an attachment, exceptional attachment and money attachment cannot be carried out unless prior authority has been granted by the sheriff. All these attachments may not be carried out on Sundays and public holidays, before 8am or after 8pm, and if started within these times it cannot continue past 8pm. The sheriff officer carrying out the attachment has the power to 'open shut and lockfast places' in order to carry out a money attachment.
Bankruptcy Expand The Scottish legal term for bankruptcy is Sequestration. It is a process whereby a person is formally declared to be bankrupt following on from an application to the Accountant in Bankruptcy. The procedure is governed mainly by the Bankruptcy (Scotland) Act 1985 (the 1985 Act) and the Bankruptcy and Debt Advice (Scotland) Act 2014. The legislation covering all areas of personal insolvency can be found in the “Guidance” section of the AIB’s Website. www.aib.gov.uk The person is no longer known as a bankrupt but is referred to simply as the debtor. The process of sequestration means to transfer the assets and property belonging to the debtor into the hands of a Trustee, who will then dispose of them for the benefit of the creditors. Bankruptcy can have serious consequences for a debtor and should never be entered into lightly. Bankruptcy (who can apply) A Creditor - A creditor or a group of creditors who are owed at least £3,000 may apply to the sheriff court for a debtor’s sequestration. Debtor MUST have been issued with a Debt Advice and Information Package (DAIP) the court will then issue a Warrant to Cite giving the date of the hearing. If debtor wishes to be sequestrated they need not attend court but if they do not wish to be sequestrated they must attend or be represented at court to give their reasons. A Trustee - A Trustee acting under a trust deed can apply for a debtor's sequestration under Section 5(2) (b) (iv) of the 1985 Act if: The debtor has failed to comply with an obligation under the trust deed, or a reasonable requirement or instruction of the trustee and the trustee avers that bankruptcy is in the best interests of creditors. A Debtor - A Debtor who meets the various criteria may petition for their own bankruptcy. The routes available to the debtor have increased in order to prevent those for whom bankruptcy is the most suitable option from being excluded. The conditions for a debtor applying for bankruptcy are: they must owe a total debt of at least £1,500, but no more than £17,000 for MAP. If your debts are over £17,000, or own assets valuing £2,000 or more then you can only apply for bankruptcy under the full administration route they must have received money advice from a money adviser they must be living in Scotland, have lived in Scotland or have established a place of business in Scotland, in the year immediately preceding the date of your application they must not have been made bankrupt in the last 5 years they must pay the application fee. (Depending on which route into bankruptcy they apply for, there are two different costs: It costs £90 to submit an application through the Minimal Asset Process (MAP) or £200 for full administration which is through the Apparent Insolvency (AI) or Certificate for Sequestration (CFS) routes. NOTE-A debtor cannot apply for bankruptcy through MAP if they have been made bankrupt through MAP in the previous 10 years. They must also meet one of the following conditions: they must meet the conditions for MAP; or they must be Apparently Insolvent; or they must have a Certificate of Sequestration. Specific routes: Apparent insolvency route (AI) - most likely the creditor would have served a charge for payment or a statutory demand; this would allow the debtor to petition for their own bankruptcy. Minimal Asset Process (MAP) - To meet the criteria for this route a debtor must not have a single asset worth more than £1,000. This excludes a vehicle worth up to £3,000 that they reasonably require, for example, to get to work. The total value of their total assets cannot be more than £2,000 (excluding a vehicle mentioned above) and they must not own, or jointly own, a house or any other property or land and you must not have debts of more than £17,000. In addition to the above conditions they also need to have been in receipt of benefits for at least 6 months or have been assessed as not required to make a contribution towards the bankruptcy. They also require a Certificate for Sequestration which must have been signed by a qualified money adviser. Certificate for Sequestration Route (CFS) - this route was introduced to provide debt relief for those debtors who could not demonstrate that they met the requirements for apparent insolvency. This route was introduced by the Home Owner and Debtor protection (Scotland) Act 2010 (click here to view act) and requires a money adviser or insolvency practitioner to declare that the debtor is unable to pay their debts as they become due.
Basic bank accounts Expand Basic bank accounts offer a convenient place to keep money you need for everyday use. You can arrange to have wages, State Pension and benefits or tax credits paid into one. You can also pay in cheques or cash free of charge, and set up 'direct debits' which pay regular bills automatically from your account. With a basic bank account you get a cash card which you can use at a bank machine to withdraw cash. Some also offer a 'debit card' that you can pay for items with, and get 'cashback'; but with a basic account these will only work if there's enough money in your account. You don't get a cheque book with a basic bank account, and you can't take out more money than is in the account ('go overdrawn'). For this reason basic bank accounts are useful for anyone worried about overspending. The Money Advice Service have excellent information on their website explaining basic bank accounts. They also have a “How to choose a basic bank account” comparison table which allows people to select the account that is right for them.
Calling up notice Expand A lender can issue a calling up notice if the debtor fails to keep up with the mortgage payments. Basically the notice ends the agreement and asks the debtor for repayment of the principal sum, plus arrears, interest and expenses within two months. If the debtor fails to comply with the calling up notice the creditor can exercise their rights which include, entering into possession, selling or letting the subjects. The creditor also has to serve a Section 11 notice on the debtor’s local council which states that the creditor intends to repossess the property and the debtor may become homeless. Recently there have been two very important court decisions involving when and how a calling up notice should be served: 1. On 24/11/10 the UK Supreme Court decided that lenders must serve a calling up notice otherwise the action will be incompetent. (A decision from the Supreme Court binds all courts below it). 2. On 26/07/11 at Edinburgh Sheriff Court in the case of Santander V David Gallagher it was held that when a lender uses sheriff officers to serve a calling up notice then they must physically give the calling up notice to the borrower. (To comply with S.19 (6) of 1970 Act) It is not enough to check that the person lives there and then leave at the house-as often happens. The full case can be viewed by going the Scottish Court Website. A calling up notice ceases to have effect after five years from the date of the notice.
Charge for payment Expand A charge for payment is a formal request in writing served on the debtor by the creditor after they have obtained a decree from the court. It gives the debtor fourteen days to pay the debt if they are resident within the UK and 28 days if they are outwith the UK. The charge can also be used to prove apparent insolvency and would allow a debtor to petition for their own sequestration.
Consolidation loans Expand A consolidation loan is where a borrower takes out a further loan to pay off all the existing loans, therefore consolidating the debts into one single loan. The new loan can be unsecured but normally it is secured against the home becoming a second mortgage or secured loan. This can be a workable option for some borrowers as the single payment will be less than they have been paying to all their other creditors, if they can manage to keep up the normal payments without having to resort to additional loans. However, if the normal payments cannot be met or they continue to borrow on top of the consolidated loans then the borrower’s home could be at risk.
Competition and Markets Authority (CMA) Expand The Competition and Markets Authority (CMA) work to promote competition for the benefit of consumers, both within and outside the UK. Their aim is to make markets work well for consumers, businesses and the economy. They came into being on 1 April 2014 and took over many of the functions of the Competition Commission (CC) and the Office of Fair Trading (OFT). They are responsible for: investigating mergers which could restrict competition conducting market studies and investigations in markets where there may be competition and consumer problems investigating where there may be breaches of UK or EU prohibitions against anti-competitive agreements and abuses of dominant positions bringing criminal proceedings against individuals who commit the cartel offence enforcing consumer protection legislation to tackle practices and market conditions that make it difficult for consumers to exercise choice co-operating with sector regulators and encouraging them to use their competition powers considering regulatory references and appeals They work in partnership with other a range of organisations in the UK and internationally. In the UK these include: Trading Standards Citizens Advice and Citizens’ Advice Scotland business groups sector regulators other government departments fellow competition and consumer bodies across the world Report issues to the CMA Please use this form to report any issues relating to a market not working well, unfair terms in a contract, or any issues related to poor competition.
Consumer Credit Act 1974 Expand Before 1974, consumer credit law had developed in a piece meal way, largely as a response to advances in retail practices. Numerous different Acts were involved in enforcing the law which dealt with the type of lender, rather than dealing with credit as a whole. In 1968 the Crowther Committee was appointed to review the whole legal framework of credit granting and security. Its remit was to review all aspects of credit control and make recommendations for change. The Committee recommended sweeping changes with the main principles to be: The redress of bargaining equality The control of trading malpractice The regulation of default remedies The Crowther Committee’s report led to the Consumer Credit Act 1974 (CCA 74). It afforded the consumer greater protection while embodying the American principle of ‘truth and openness in lending’ throughout the Act. The Act was amended by the Consumer Credit Act 2006 which came into force on the 30 March 2006. The changes were phased in over a two year period and have now been implemented. It also amended the Consumer Credit Act 1974; to extend the ombudsman scheme under the Financial Services and Markets Act 2000 to cover licensees under the Consumer Credit Act 1974; and for connected purposes. The Act deals with all regulated credit agreements financial limits were removed on 1st April 2008. Further changes to consumer credit regulations: After the tremendous task of implementing the changes which flowed from the 2006 Act there came further changes from the direction of the European Community. The Consumer Credit Directive From the 1st February 2011 any lenders providing unsecured loans which are regulated by the Consumer Credit Act 1974 will have to comply with new guidelines imposed by the Consumer Credit (EU Directive) Regulations 2010. The new directive makes a number of changes to the CCA 74 in an attempt to make lending fairer while giving borrowers greater rights. The rules have been in force on a voluntary basis since April 2010 but on the 1st February they became compulsory. Loans on or after the 1st February will have to comply with the new regulations provided that they meet the criteria. To view guidance on the directive which also gives a summary of the changes click here. The Consumer Credit Act 1974 is a UK Act and therefore falls under the auspices of the Westminster Parliament. Present On 1st April 2014, the Financial Conduct Authority (FCA) took over the regulation of consumer credit firms, which were previously regulated by the Office of Fair Trading
Continuation (of an action) Expand The continuation of an action is an order made by a sheriff to continue the case to another date. The debtor would need to make a personal request to the sheriff to have the case continued. This can be a helpful way for the debtor to gain time to come to some arrangement with the creditor. The case is still on the court agenda as this is only a temporary postponement.
Council tax Expand This is the system of local taxation used to part fund the services of local government in Scotland. There are council tax benefit payments available for those who are eligible and there are discounts and exemptions available depending on the circumstances. For more information click here.
Credit agreements Expand Below are listed some of the more common types of credit agreement: Bank overdraft - this is a type of revolving credit which allows a customer to overdraw on their current account, normally up to an agreed limit. Penalties for unauthorised overdrafts can be severe. Hire purchase/Conditional sale agreement - very similar in composition, the main difference between the two is that in a conditional sale agreement the customer is committed to purchasing the goods whereas in a hire purchase agreement the customer is hiring the goods until the last payment is made which contains a nominal option to buy payment. Main similarity is that in both types of agreement the goods do not become the property of the customer until the final payment is made so the goods remain the property of the creditor till then. There are special conditions governing protection and termination of these two types of agreement. If a customer has paid one third or more of the total price of the goods they become protected and the creditor would need a court order to repossess them. (Note-in Scotland it can be argued that a creditor would need a court order at any time to repossess) There are also rights governing voluntary termination by a customer. If a customer has paid more a half or more of the total price payable they can terminate the agreement and hand back the goods. If they have paid less than half the total price they can still terminate but would have to make up the difference. The customer must give written notice to the creditor that they wish to terminate the agreement and must do it before the creditor terminates otherwise the opportunity will, be lost. Termination is different from voluntarily handing back the goods where the customer may find themselves with no goods and having to pay any shortfall. Credit card - this is again a type of revolving credit where the customer can use the card to purchase goods or services or even draw cash advances. The card normally has a borrowing or spending limit which the customer should not exceed or there may be penalties. Customer can make a minimum monthly or whatever they can afford. Interest at a varying rate is added to the balance. Credit sale agreement - this is a straight forward agreement where the customer purchases goods and agrees to make regular payments over a set period of time. The customer immediately becomes the owner of the goods and the interest rate may vary. Secured loan (Second mortgage) - in this type of loan the customer puts up some form of security, normally the home. This loan may or may not be regulated by the consumer credit act depending on its purpose and when it was taken out. Prior to April 2008 the consumer credit act only applied to agreements worth £25,000 or less. Also not covered by the consumer credit act were secured loans that had been taken out with the first mortgage lender for home improvements. When the financial limits were removed from the Act all secured lending come under its jurisdiction. The first-charge mortgage sector (your traditional home-purchase mortgage) is regulated by the Financial Conduct Authority (FCA). Credit agreements (withdrawal) The client has the right to withdraw from a prospective credit agreement at any time before it has been executed (e.g. signed by both parties). Credit agreements (cancellation) From the 1 February 2011 a customer has the right to withdraw from a credit agreement within 14 days without giving any reason under the consumer credit directive. It applies to all regulated agreements except: • agreements for credit exceeding £60,260 • agreements secured on land • restricted-use credit agreements to finance the purchase of land • agreements for bridging loans in connection with the purchase of land If the agreement was made before 1 February 2011, cancellation rights apply only where the credit agreement was: • signed away from the trade premises; and • following face to face negotiation with the creditor or supplier. Telephone calls do not count as face to face In this case the client has a five day cooling off period from receipt of the creditor's signed copy of the agreement and a notice of cancellation rights. For guidance on the Consumer Credit Directive click here
Credit reference agencies Expand Credit reference agencies give lenders a range of information about potential borrowers, which lenders use to make their decisions. The information shared may include information about your previous credit history. They hold certain information about most adults in the UK. This information is called your credit reference file or credit report. The three main consumer credit reference agencies in the UK are Equifax, Experian and TransUnion (formerly Callcredit).
Credit unions Expand A Credit Union is a profit sharing, democratically run financial co-operative which offers convenient savings and low interest loans to its members. The members own and manage their credit union themselves. The three main aims of a Credit Union are: • To encourage its members to save regularly • To provide loans to members at very low rates of interest • To provide members with help and support on managing their financial affairs (if required) The Financial Conduct Authority (FCA) oversees and regulates credit unions. The Association of British Credit Unions Ltd (ABCUL) is the leading trade association for credit unions in England, Scotland and Wales. ABCUL represents around 70% of credit unions who in turn provide services to 85% of the British credit union membership
Debt Arrangement Scheme (DAS) Expand DAS is a statutory scheme run by the Scottish Government to help debtors pay their debts by giving them more time to pay without the threat of court action from creditors. DAS freezes interest, fees and charges on the debt from the date when the DAS Debt Payment Programme (DPP) is approved and these will be written off if the debtor completes the programme.The scheme is delivered free by approved money advisers, by local council money advisers, by Citizens Advice Bureaux or by other Accountant in Bankruptcy approved money advisers. The scheme protects a debtor’s assets, including the home (as long as the debtor can keep up the mortgage payments). The Debt Arrangement Scheme changed on the 1st July 2011 and has allowed more advisers to deliver DAS to the public. Some advisers work in the private sector and will make a charge for the service, however; they will have to advise debtors that there is free advice also available. It will be then up to the debtor to make the choice of which agency they use. Entry provisions have also changed and couples can have a joint DAS and debtors with single debts can now enter a DAS. There is also payment breaks available for debtors who may suffer a short sharp reduction in their income. The DAS website contains more detailed explanations and guidance for advisers, debtors and creditors.
Debt payment programme (DPP) Expand A debt payment programme (DPP) is set up by a DAS approved money adviser. This is an agreement that allows debtors to pay off debts over an extended period of time. The programme can be for any amount of money or for any reasonable length of time. If creditors all agree or are deemed to have agreed (because they do not respond) the debt payment programme under DAS is agreed automatically. Creditors will then be bound by this DPP as long as the debtor sticks to the agreement. If creditors do not consent then the DAS administrator can still approve the debt payment programme if it is fair and reasonable to do so. If the circumstances change, the programme can be varied to take account of this (if all creditors agree or if the DAS administrator decides it is fair and reasonable).
Debt and information package Expand The Debt Advice and Information Package (DAIP) provides important information for debtors to help them deal with their creditors. Where the debtor is an individual, a creditor is required by law to arrange to provide a DAIP prior to using most types of diligence. There is a set timescale for the issue of a DAIP within each of the processes in which it is required. Generally it must be issued no earlier than 12 weeks before diligence is carried out. The DAIP must also be issued before a creditor presents a petition for the debtor's bankruptcy and before the signing of a trust deed.
Decree Expand A decree is basically an order of the court containing the court’s decision on the case. There are different types of decree but here we will only consider the most common ones used in a creditor versus debtor context. Decree in favour of the pursuer(Normally creditor): This means that the pursuer has been successful in their claim, it is sometimes referred to colloquially as an “open decree”. This will allow the pursuer to start diligence action against the defender (debtor) to retrieve the money owed. Decree in absenceThis is a decree granted in favour of the pursuer where the defender did not respond in any formal to the court summons. Approximately over 80% of cases that pass through the sheriff court are undefended. Decree of absolvitorThis means that the pursuer's claim has been rejected by the court and they have made a decision in favour of the defender. This type of decree is much better for the defender as it stops the pursuer from raising the same action again. Decree of dismissal (of the claim)A decree of dismissal is also a decree in favour of the defender but the pursuer could raise the same action again.
Default notices Expand Under Section 87(1) of the Consumer Credit Act 1974 the creditor is allowed to issue a default notice which gives the customer fourteen days from the date of receipt to pay the arrears. The default notice must contain all of the necessary information under the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983. A creditor must serve a default notice before they can proceed to legal enforcement methods.
Diligence on the dependence Expand Diligence on the dependence is a provisional or protective measure which is used whilst a court action is ongoing, or just before an action is raised, but has not been finally disposed of. It allows the creditor (pursuer) in the action to take steps to preserve the debtor's (defender’s) property so that it will be available to satisfy any claim eventually upheld by the court. Undoubtedly the effectiveness of using the courts to uphold the law would be undermined if, during the course of a court action, a party was able to dispose of money or other assets in order to avoid making a payment at the conclusion of those proceedings. Thus, diligence on the dependence is a necessary means of protecting those who are forced to use the courts to recover payments lawfully due to them and preventing disposal of assets in an attempt to defeat their legitimate rights. Most common diligences used are Arrestment on the Dependence and Inhibition on the Dependence.