Debt Arrangement and Attachment (Scotland) Act 2002

Part 1 — The debt arrangement scheme

Interpretation of this Part and Parts 3 and 4

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This Part of this Act constitutes a scheme (to be known as the “debt arrangement scheme”) under which persons may arrange for their debts to be paid under debt payment programmes.

Debt payment programmes

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• (1) A debt payment programme is a programme which provides for the payment of money owed by a debtor.

• (1A) Subsection (1) above is subject to any provision in regulations made under section 7A(1) below.

• (2) The Scottish Ministers may, on an application by a debtor, approve any debt payment programme set out in the application.

• (3) Such an application ... shall—

• (a) specify, to the best of the debtor’s knowledge and belief, in relation to each debt which the debtor is proposing to be paid under the debt payment programme—

• (i) the amount outstanding;

• (ii) the creditor to whom the debt is due; and

• (iii) the period for which the debt has been due;

• (b) set out the arrangements under which those debts are, in accordance with the provisions of the programme, to be paid, in particular specifying—

• (i) the amounts which the debtor proposes to pay under the programme;

• (ii) the proposed regularity of those payments;

• (iii) the manner in which those payments are to be made; and

• (iv) the manner in which, and period over which, each of the debts included in the programme is to be paid;

• (c) specify the name and address of the person (the “payments distributor”) who is to—

• (i) receive payments from the debtor; and

• (ii) pay, on behalf of the debtor, the debts included in the programme,

in accordance with the provisions of the programme; and

• (d) contain such other information (including information relating to the debtor’s financial circumstances), and be in such form, as may be prescribed.

• (4) Such an application shall, subject to any contrary provision in regulations made under section 7(1) or 7A(1) below, incorporate the consent, indicated in the prescribed form, of all the debtor’s creditors.

• (5) A person’s name and address shall not be specified in an application for approval of a debt payment programme as a payments distributor unless that person has been approved by the Scottish Ministers as a person suitable to carry out the functions of a payments distributor.

Abolition of Domestic Rates Etc. (Scotland) Act 1987 (c.47)

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• (1) A debtor is not entitled to make an application for the approval, or the variation, of a debt payment programme unless the debtor has obtained the advice of a money adviser in relation to—

• (a) the debtor’s financial circumstances;

• (b) the effect of the proposed programme or, as the case may be, the proposed variation of the programme; and

• (c) the preparation of the application.

• (2) Such an application shall—

• (a) contain a ... declaration by the money adviser who provided the advice referred to in subsection (1) above that such advice has been given; and

• (b) specify the name and address of the money adviser.

• (3) Subsections (1) and (2) above are subject to any contrary provision in regulations made under section 7(1) below.

Abolition of Poindings and Warrant Sales Act 2001 (asp 1)

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• (1) Where a debt payment programme has been approved or varied, the debts specified in the application for the approval or, as the case may be, the variation shall be paid in accordance with the programme.

• (2) It is not competent—

• (a) to serve a charge for payment in respect of; or

• (b) subject to subsection(2A), other than under subsection (2A), to commence or execute any diligence to enforce payment of,

• (c) to commit to prison under section 4 of the Civil Imprisonment (Scotland) Act 1882, other than for the purposes of section 40A of the Child Support Act 1991, in respect of,

• (c) to commit a debtor to prison under section 4 of the Civil Imprisonment (Scotland) Act 1882 (except for the purposes of section 40A of the Child Support Act 1991 ) in respect of,

any debt owed by a debtor who has debts which are being paid under an approved debt payment programme.

• (2A) It is competent to–

• (a) auction an attached article where–

• (i) notice has been given to the debtor under section 27(4) below; or

• (ii) an article has been removed, or notice of removal has been given, under section 53 below;

• (b) implement a decree of furthcoming;

• (c) implement a decree or order for sale of a ship (or a share of it) or cargo; and

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2A) Despite subsection (2)(b), it is competent to—

• (a) auction an attached article where—

• (i) notice has been given to the debtor under section 27(4) below; or

• (ii) an article has been removed, or notice of removal has been given, under section 53 below;

• (b) implement a decree of furthcoming;

• (c) implement a decree or order for sale of a ship (or a share of it) or cargo.

• (3) A creditor is not entitled to found on any debt owed by such a debtor in presenting, or concurring in the presentation of, a petition for the sequestration of the debtor’s estate.

• (4) There is to be disregarded, for the purposes of the exercise by a creditor of any rights to enforce a debt or remedies to like effect, any period during which the debtor’s debts were subject to an approved debt payment programme.

• (5) The debts referred to in subsections (2) to (4) above are restricted to—

• (a) those to which the debtor’s debt payment programme relates; and

• (b) any other debts owed to creditors who have been given notice, in the prescribed form, of the approval of the debt payment programme.

Stamp Duty (Collection and Recovery of Penalties) Regulations 1999 (S.I. 1999/2537)

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• (1) The Scottish Ministers may, on an application by the debtor or by any creditor, approve the variation of a debt payment programme.

• (2) The Scottish Ministers may not consider an application for approval of a variation under subsection (1) above unless—

• (a) where the application is made by the debtor, a copy of the application has been given to each creditor who is owed a debt which is being paid under the debt payment programme; or

• (b) where the application is made by a creditor, a copy of the application has been given to the debtor and to each other creditor who is owed such a debt.

• (3) Such an application may seek the variation of any condition which is attached to the approval of the programme or, as the case may be, a previous variation of the programme.

• (4) An application for the variation of a debt payment programme shall—

• (a) contain such information, and be in such form, as may be prescribed; ...

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deduction from earnings

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• (1) Where an approved debt payment programme requires sums to be paid to the payments distributor by way of deduction of the debtor’s earnings from employment, the debtor shall provide an instruction, in the prescribed form, to the person by whom the debtor is employed to make—

• (a) deductions from the debtor’s earnings; and

• (b) payments of the amounts deducted to the payments distributor,

in accordance with the provisions of the debt payment programme.

• (2) It is the duty of the employer to comply with any instruction so provided.

Debt payment programmes: power to make further provision

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• (1) The Scottish Ministers may, by regulations, make such further provision as they think fit in connection with—

• (a) applications for the approval, or for the variation, of debt payment programmes;

• (b) the manner in which such programmes are to operate, including conditions with which debtors, creditors, payments distributors or money advisers must comply;

• (c) the effect of such programmes; and

• (d) the effect of the failure of an employer to comply with the duty under section 6(2) above.

• (2) The regulations may, in particular, make provision about—

• (a) the class of person who may or may not make an application for the approval, or the variation, of a debt payment programme;

• (b) the class of debt in respect of which such an application may or may not be made;

• (ba) circumstances in which some or all of the functions of a money adviser under section 3 above may instead be carried out by an approved intermediary;

• (bb) circumstances in which a debtor is entitled to make an application for the approval, or the variation, of a debt payment programme where the debtor has not obtained advice under section 3(1) above;

• (bc) the manner in which—

• (i) the seeking of the consent of creditors to applications for approval of debt payment programmes; or

• (ii) the making of such applications,

affects the rights and remedies of creditors or other third parties;

• (bd) the method of assessing the amount of a debtor's assets, income, liabilities and expenditure in considering applications for the approval, or the variation, of a debt payment programme,

• (c) the matters to which the Scottish Ministers are to have regard in determining whether to approve such an application;

• (d) the conditions which may or may not be attached to an approval of such an application;

• (e) circumstances in which such an application will not be approved;

• (f) appeals against determinations by the Scottish Ministers on such applications;

• (g) circumstances in which the consent for the purposes of section 2(4) above of a creditor or creditors generally may be dispensed with;

• (h) circumstances in which a creditor may object to—

• (i) the dispensation of the creditor’s consent; or

• (ii) the approval of such an application,

and the manner in which such objection may be made;

• (i) the remitting of any such application in respect of which a creditor has made an objection to the sheriff for determination;

• (j) the manner in which a debt payment programme may be varied;

• (k) the priority in which debts are to be paid under a debt payment programme;

• (l) the ingathering and sale or other disposal of assets and the distribution to creditors of amounts so realised;

• (m) the period for which a debt payment programme is to remain in operation;

• (n) circumstances in which, and the procedure under which, any such period can, in relation to a particular debt payment programme, be shortened or extended;

• (o) circumstances in which a debt payment programme is to cease to have effect;

• (p) subject to section 4 above, the manner in which a debt payment programme affects the rights or remedies of a creditor or other third party;

• (q) circumstances in which creditors are to notify debtors of the right to make such an application and the effect of the failure of a creditor to provide that notice;

• (r) the class of person who may act as a payments distributor;

• (s) the class of person who may act as a money adviser;

• (sa) the class of person who may act as an approved intermediary;

• (t) the functions of a payments distributor;

• (u) the functions of a money adviser;

• (ua) the functions of an approved intermediary;

• (ub) the remuneration of payments distributors and money advisers,

• (v) the establishment and maintenance by the Scottish Ministers of a register of debt payment programmes and applications for the approval, and variation, of such programmes;

• (w) the information which is to be kept in such a register;

• (x) the manner in which that information is to be kept and in which it, or any part of it, is to be made available to the public; and

• (y) the determination, and charging, by the Scottish Ministers of fees in respect of—

• (i) the consideration of applications for the approval, or the variation, of a debt payment programme; and

• (ii) the provision of information recorded in the register of debt payment programmes.

• (3) The regulations may also—

• (a) make different provision in relation to such different types of debtors, debts or other matters as may be described by the Scottish Ministers;

• (b) provide that such different provision is to have effect only for such period as is specified by the Scottish Ministers; and

• (c) provide that, on the expiry of that period, the Scottish Ministers may determine that the different provision to which they relate is to—

• (i) continue to have effect without limit of time;

• (ii) continue to have effect for such further period as may be determined by the Scottish Ministers; or

• (iii) cease to have effect.

• (4) The regulations may also modify any enactment (including this Act), instrument or document for the purposes of making such further provision as is mentioned in subsection (1) above.

Functions of the Scottish Ministers

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• (1) The Scottish Ministers may by order provide that their functions under this Part of this Act may be performed on their behalf by such other person as may be specified in the order.

• (2) Such an order does not allow regulations under this Part of this Act or any further order under this section to be made by any person other than the Scottish Ministers.

• (3) Such an order may make different provision for different functions.

Interpretation of Part

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• (1) In this Part of this Act—

• “ approved intermediary ” means any person, not being a money adviser, who has been approved by the Scottish Ministers as a person who may give advice to a debtor for the purposes of section 3(1) above;

• “money adviser” means any person who has been approved by the Scottish Ministers as a person who may give advice to a debtor for the purposes of section 3(1) above; and

• “prescribed” means prescribed by regulations made by the Scottish Ministers.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part 2 — Attachment

Attachment

Attachment

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• (1) There shall be a form of diligence over corporeal moveable property for recovery of money owed; it is to be known as attachment.

• (2) Attachment is exigible only in execution of a decree or document of debt and only upon property owned (whether alone or in common) by the debtor.

• (3) Attachment is competent only where—

• (a) the debtor has been charged to pay the debt;

• (b) the period for payment specified in the charge has expired without payment being made; and

• (c) where the debtor is an individual, the creditor has, no earlier than 12 weeks before taking any steps to execute the attachment, provided the debtor with a debt advice and information package.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) In this section—

• ...

• “debt advice and information package” means a document or bundle of documents containing such information (including information regarding the availability of money advice within the debtor’s locality), and in such form, as the Scottish Ministers may determine;

• “decree” means—a decree of the Court of Session, of the High Court of Justiciary or of the sheriff;a decree of the Court of Teinds;a summary warrant;a civil judgment granted outside Scotland by a court, tribunal or arbiter which by virtue of any enactment or rule of law is enforceable in Scotland;an order or determination which by virtue of any enactment is enforceable as if it were an extract registered decree arbitral bearing a warrant for execution issued by the sheriff;a warrant granted, in criminal proceedings, for enforcement by civil diligence;an order under section 114 of the Companies Clauses Consolidation (Scotland) Act 1845 (c.17);a determination under section 46 of the Harbours, Docks and Piers Clauses Act 1847 (c.27); ora liability order within the meaning of section 33(2) of the Child Support Act 1991 (c.48),being a decree, warrant, judgment, order or determination which, or an extract of which, authorises attachment; and

• “document of debt” means—a document registered for execution in the Books of Council and Session or the sheriff court books; ...a document or settlement which by virtue of an Order in Council made under section 13 of the Civil Jurisdiction and Judgments Act 1982 (c.27) is enforceable in Scotland,a court settlement or authentic instrument (within the meaning of Article 3 of the Hague Convention) which is registered in the sheriff court under the Hague Convention; a maintenance arrangement (within the meaning of Article 3 of the Hague Convention) which is registered in the sheriff court under the Hague Convention, being a document, bill, settlement, instrument or arrangement which, or an extract of which, authorises attachment.

• “the Hague Convention” means the Convention on the International Recovery of Child Support and other forms of Family Maintenance done at The Hague on 23rd November 2007; ...

• ...

• (6) The Scottish Ministers may by order modify the definitions of “decree” and “document of debt” in subsection (5) above so as to—

• (a) add or remove types of decree or document to or, as the case may be, from those referred to in that provision; or

• (b) vary any of the descriptions of the types of decree or document there referred to.

• (7) In this Act, references to attaching are references to the execution of attachment.

Articles exempt from attachment

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• (1) It is not competent to attach—