After you have been successful in litigation, the Court will issue a decree. The general rule is that expenses follow success, so hopefully you should have a decree for the sum due to you plus interest and judicial expenses. As a general rule of thumb, judicial expenses should cover most of your legal fees (usually around 70 – 80%).
We can advise on enforcing a decree and recovering payment of your debt. Enforcement can require several methods of what is known as ‘diligence’ – a legal term used in Scotland to describe methods used to enforce a court order. Diligence usually starts with serving a charge for payment on the paying party. A charge for payment is a formal demand and requires to be served by Sheriff Officers. The charge for payment is a fourteen-day notice to the debtor to make full payment of the sum due.
If the debtor fails to make payment to you within the 14 days, then you can proceed with further action. This can include:-
- earnings arrestment
- bank arrestment
- Inhibition of property
- Petition for Sequestration or the Winding-Up of a company.
An earnings arrestment is served on the debtor’s employer and therefore does not apply to anyone who is self-employed. The employer is obliged, in terms of the arrestment, to remit a proportion of the debtor’s salary to the creditor on each pay day. The calculation of what can be deducted is set by legislation and this is usually a very slow way of recovering a debt.
If you know a debtor is due to be paid funds by a third party (e.g. if a property transaction was about to settle), you can arrest funds in the hands of that third party. However, the most common type of arrestment is a bank arrestment. Arrestments are instantaneous, so they will only “catch” funds if they are available exactly at the time of service of the arrestment. The arrestment only applies to funds held in credit at the time.
An Attachment Order is appropriate when the debtor has an asset of value such as a vehicle, stock or equipment. There are a number of items relating to the household which are exempt from an Attachment order which covers items “out with a dwelling house”. If items can be Attached, Sheriff Officers can remove them for sale at public auction.
An application can be made to court for an Exceptional Attachment Order which covers items in the home, but this can be cost-prohibitive and the order is not granted lightly by the court.
When the days of Charge expire (14 days), the creditor can consider petitioning the court for the Sequestration of an individual or the Winding-Up of a company. As these proceedings can be expensive, it is wise to carry out due diligence to establish if the debtor is likely to have the assets to ultimately be in a position to pay some or all of the debt to the creditor. Secured creditors will rank in preference over unsecured creditors when the funds are realised and distributed. This can also be a slow process and the process can run for two to three years without much difficulty so it is, unfortunately, not a quick fix.
We have expertise in enforcing CCJ’s and non-Scottish orders in Scotland and we can advise you on how those judgements can be registered for enforcement in Scotland
