Debtors (Scotland) Act 1987

PART I — EXTENSION OF TIME TO PAY DEBTS

Time to pay directions on granting decree

Time to pay directions

1

• (1) Subject to subsections (3) to (5) below and to section 14 of this Act, on an application by the debtor, the court or the First-tier Tribunal, on granting decree for payment of any principal sum of money, shall, if satisfied that it is reasonable in all the circumstances to do so, and having regard in particular to the matters mentioned in subsection (1A) below, direct that any sum decerned for in the decree (including any interest claimed in pursuance of subsections (6) and (7) below) or any expenses in relation to which the decree contains a finding as to liability or both such sum and such expenses shall be paid—

• (a) by such instalments, commencing at such time after the date of intimation by the creditor to the debtor of an extract of the decree containing the direction, payable at such intervals; or

• (b) as a lump sum at the end of such period following intimation as mentioned in paragraph (a) above,

as the court or the First-tier Tribunal may specify in the direction.

• (1A) The matters referred to in subsection (1) above are—

• (a) the nature of and reasons for the debt in relation to which decree is granted;

• (b) any action taken by the creditor to assist the debtor in paying that debt;

• (c) the debtor's financial position;

• (d) the reasonableness of any proposal by the debtor to pay that debt; and

• (e) the reasonableness of any refusal by the creditor of, or any objection by the creditor to, any proposal by the debtor to pay that debt.

• (2) A direction under subsection (1) above shall be known as a “time to pay direction”.

• (3) Where a court or the First-tier Tribunal grants a decree which contains a finding as to liability for expenses but does not at the same time make a time to pay direction, then (whether or not the decree also decerns for payment of the expenses), it shall not at any time thereafter be competent for the court or the First-tier Tribunal to make a time to pay direction in relation to those expenses.

• (4) Where a court or the First-tier Tribunal grants a decree which contains a finding as to liability for expenses and makes a time to pay direction in relation to those expenses but—

• (a) does not decern for payment of the expenses; or

• (b) decerns for payment of the expenses as taxed by the auditor of court or auditor of the Court of Session but does not specify the amount of those expenses,

in relation to so much of the time to pay direction as relates to the expenses, the reference in subsection (1) above to the date of intimation of an extract of the decree containing the direction shall be treated as a reference to the date of intimation of an extract of a decree decerning for payment of the expenses, being an extract specifying their amount.

• (5) It shall not be competent for the court or the First-tier Tribunal to make a time to pay direction—

• (a) where the sum of money (exclusive of any interest and expenses) decerned for exceeds £10,000 or such amount as may be prescribed in regulations made by the Lord Advocate;

• (b) where the decree contains an award of a capital sum on divorce or on the granting of a declarator of nullity of marriage;

• (c) in connection with a maintenance order;

• (cc) in connection with a liability order within the meaning of the Child Support Act 1991;

• (d) in an action by or on behalf of the Commissioners for Her Majesty’s Revenue and Customs for payment of any sum recoverable under or by virtue of any enactment or under a contract settlement;

• (da) in an action by or on behalf of Revenue Scotland for payment of any sum recoverable under or by virtue of the Revenue Scotland and Tax Powers Act 2014 (asp 16) or any other enactment in respect of a devolved tax, under a contract settlement or under a settlement agreement,

• (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (f) in an action for payment of—

• (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (ii) car tax due under the Car Tax Act 1983 ;. . .

• (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) Without prejudice to section 2(5) of this Act, interest payable under a decree containing a time to pay direction (other than interest awarded as a specific sum in the decree) shall not be recoverable by the creditor except in accordance with subsection (7) below.

• (7) A creditor who wishes to recover interest to which subsection (6) above applies shall serve a notice on the debtor, not later than the date prescribed by Act of Sederunt or the First-tier Tribunal for Scotland Housing and Property Chamber (Procedure) Regulations 2017 occurring—

• (a) in the case of a direction under subsection (1)(a) above, before the date when the last instalment of the debt concerned (other than such interest) is payable under the direction;

• (b) in the case of a direction under subsection (1)(b) above, before the end of the period specified in the direction,

stating that he is claiming such interest and specifying the amount of the interest claimed.

• (8) Any sum paid by a debtor under a time to pay direction shall not be ascribed to interest claimed in pursuance of subsections (6) and (7) above until the debt concerned (other than such interest) has been discharged.

• (8A) In paragraph (d) of subsection (5) above, “contract settlement” means an agreement made in connection with any person's liability to make a payment to the Commissioners for Her Majesty's Revenue and Customs under or by virtue of any enactment.

• (8B) In paragraph (da) of subsection (5)—

• “contract settlement” means any agreement made in connection with any person's liability to make a payment to Revenue Scotland under or by virtue of the Revenue Scotland and Tax Powers Act 2014 (asp 16) or any other enactment in respect of a devolved tax,

• “devolved tax” has the meaning given by section 80A(4) of the Scotland Act 2012 (c. 46),

• “settlement agreement” has the meaning given by section 246(1) of the Revenue Scotland and Tax Powers Act 2014 (asp 16).

• (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effect of time to pay direction on diligence

2

• (1) While a time to pay direction is in effect, it shall not be competent—

• (a) to serve a charge for payment; or

• (b) to commence or execute any of the following diligences—

• (i) an arrestment and action of furthcoming or sale;

• (ii) an attachment;

• (iii) an earnings arrestment;

• (iv) an adjudication for debt,

• (v) a money attachment;

• (vi) a land attachment;

• (vii) a residual attachment,

to enforce payment of the debt concerned.

• (2) While a time to pay direction is in effect an arrestment used on the dependence of the action or in security of the debt concerned shall remain in effect—

• (a) if it has not been recalled; and

• (b) to the extent that it has not been restricted under subsection (3) below,

but, while the direction is in effect, it shall not be competent to commence an action of furthcoming or sale following on such an arrestment.

• (2A) Where the arrestment which remains in effect as mentioned in subsection (2) above is an arrestment such as is mentioned in subsection (1) of section 73J of this Act, while the time to pay direction is in effect—

• (a) it shall not be competent to release funds under subsection (2) of that section; and

• (b) the period during which the direction is in effect shall be disregarded for the purposes of determining whether the period mentioned in subsection (3) of that section has expired.

• (2B) While a time to pay direction is in effect an interim attachment shall remain in effect—

• (a) if it has not been recalled; or

• (b) to the extent that it has not been restricted under subsection (3) below.

• (3) The court or the First-tier Tribunal may, on making a time to pay direction, recall or restrict an interim attachment or an arrestment of the kind described in subsection (2) above.

• (4) If an interim attachment or an arrestment of the kind described in subsection (2) above is in effect, the court or the First-tier Tribunal may order that the making of a time to pay direction and the recall or restriction of the interim attachment or arrestment shall be subject to the fulfilment by the debtor of such conditions within such period as the court or the First-tier Tribunal thinks fit; and, where the court or the First-tier Tribunal so orders, it shall postpone granting decree until such fulfilment or the end of that period, whichever is the earlier.

• (5) Where a time to pay direction is recalled or ceases to have effect, otherwise than—

• (a) under section 12(2)(a) of this Act; or

• (b) by reason of the debt concerned being paid or otherwise extinguished,

the debt in so far as it remains outstanding and interest thereon, whether or not awarded as a specific sum in the decree, shall, subject to any enactment or rule of law to the contrary, become enforceable by any diligence mentioned in subsection (1)(b) above.

• (5A) Where—

• (a) a time to pay direction is recalled or ceases to have effect as mentioned in subsection (5) above; and

• (b) an arrestment such as is mentioned in section 73J(1) of this Act is in effect,

the clerk of court, sheriff clerk or, in relation to time to pay directions made by the First-tier Tribunal, a member of administration staff of the First-tier Tribunal shall intimate the fact of that recall or cessation to the arrestee.

Variation and recall of time to pay direction and arrestment

3

• (1) The court which granted a decree, or the First-tier Tribunal, where it has made an order, containing a time to pay direction may, on an application by the debtor or the creditor—

• (a) vary or recall the direction if it is satisfied that it is reasonable in all the circumstances to do so; or

• (b) if an interim attachment or an arrestment in respect of the debt concerned is in effect, recall or restrict the interim attachment or arrestment.

• (2) If an interim attachment or an arrestment in respect of the debt concerned is in effect, the court or the First-tier Tribunal may order that any variation, recall or restriction under subsection (1) above shall be subject to the fulfilment by the debtor of such conditions as the court or the First-tier Tribunal thinks fit.

• (3) The clerk of court, sheriff clerk or, in relation to time to pay directions made by the First-tier Tribunal, a member of administration staff of the First-tier Tribunal shall as soon as is reasonably practicable intimate a variation under subsection (1) above to the debtor and to the creditor, and the variation shall come into effect on the date of such intimation.

Lapse of time to pay direction

4

• (1) If, on the day on which an instalment payable under a time to pay direction becomes due, there remains unpaid a sum, due under previous instalments, of not less than the aggregate of 2 instalments, the direction shall cease to have effect.

• (2) If at the end of the period of 3 weeks immediately following the day on which the last instalment payable under a time to pay direction becomes due, any part of the debt concerned remains outstanding, the direction shall cease to have effect.

• (3) If any sum payable under a time to pay direction under section 1(1)(b) of this Act remains unpaid 24 hours after the end of the period specified in the direction, the direction shall cease to have effect.

• (4) Where—

• (a) a decree for payment of a principal sum of money contains a finding as to liability for expenses and decree for payment of the expenses is subsequently granted; and

• (b) a time to pay direction is made in relation to both the principal sum and the expenses,

if under subsections (1) to (3) above the direction ceases to have effect in relation to the sum payable under either of the decrees, the direction shall also cease to have effect in relation to the sum payable under the other decree.

Time to pay orders following charge or diligence

Time to pay orders

5

• (1) Subject to section 14 of this Act, this section applies to a debtdue under a decree or other document in respect of which —

• (a) a charge for payment has been served on the debtor;

• (b) an arrestment has been executed; or

• (c) an action of adjudication for debt has been commenced.

• (2) Subject to subsections (4) and (5) below, the sheriff or the First-tier Tribunal, on an application by the debtor, shall, if satisfied that it is reasonable in all the circumstances to do so, and having regard in particular to the matters mentioned in subsection (2A) below, make an order that a debt to which this section applies (including any interest claimed in pursuance of subsections (6) and (7) below) so far as outstanding, shall be paid—

• (a) by such instalments, commencing at such time after the date of intimation in accordance with section 7(4) of this Act ... to the debtor of the order under this subsection, payable at such intervals; or

• (b) as a lump sum at the end of such period following intimation as mentioned in paragraph (a) above,

as the sheriff may specify in the order.

• (2A) The matters referred to in subsection (2) above are—

• (a) the nature of and reasons for the debt in relation to which the order is sought;

• (b) any action taken by the creditor to assist the debtor in paying that debt;

• (c) the debtor's financial position;

• (d) the reasonableness of any proposal by the debtor to pay that debt; and

• (e) the reasonableness of the objection by the creditor to the offer by the debtor to pay that debt.

• (3) An order under subsection (2) above shall be known as a “time to pay order”.

• (4) It shall not be competent for the sheriff or the First-tier Tribunal to make a time to pay order—

• (a) where the amount of the debt outstanding at the date of the making of the application under subsection (2) above (exclusive of any interest) exceeds £10,000 or such amount as may be prescribed in regulations made by the Lord Advocate;

• (b) where, in relation to the debt, a time to pay direction or a time to pay order has previously been made (whether such direction or order is in effect or not);

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) in relation to a debt including any sum recoverable by or on behalf of the Commissioners for Her Majesty’s Revenue and Customs under or by virtue of any enactment or under a contract settlement;

• (da) in relation to a debt including any sum recoverable by or on behalf of Revenue Scotland under or by virtue of the Revenue Scotland and Tax Powers Act 2014 (asp 16) or any other enactment in respect of a devolved tax, under a contract settlement or under a settlement agreement,

• (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (f) in relation to a debt including—

• (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (ii) car tax due under the Car Tax Act 1983; . . .

• (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) Where in respect of a debt to which this section applies—

• (a) there has been a poinding of articles belonging to the debtor and a warrant of sale has been granted in respect of them but has not been executed;

articles belonging to the debtor have been attached and notice of an auction given under section 27(4) of the Debt Arrangement and Attachment (Scotland) Act 2002 (asp 17) but no auction has yet taken place;

• (aa) money owned by the debtor has been attached and removed;

• (b) moveable property of the debtor has been arrested and in respect of the arrested property—

• (i) a decree in an action of furthcoming has been granted but has not been enforced; or

• (ii) a warrant of sale has been granted but the warrant has not been executed; or

• (c) a decree in an action of adjudication for debt has been granted and the creditor has, with the debtor’s consent or acquiescence, entered into possession of any property adjudged by the decree or has obtained a decree of maills and duties, or a decree of removing or ejection, in relation to any such property,

land owned by the debtor has been attached and an order under section 97(2) of the Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3) (in this Part, the “2007 Act”) granting warrant for sale of the land has been made but that warrant has not yet been executed; or

• (d) property owned by the debtor has been attached by residual attachment and a satisfaction order under section 136(2) of the 2007 Act has been made but not yet executed,

it shall not be competent for the sheriff or the First-tier Tribunal to make a time to pay order in respect of that debt until the diligence has been completed or has otherwise ceased to have effect.

• (5A) Where, in respect of a debt to which this section applies, an arrestment such as is mentioned in subsection (1) of section 73J of this Act has been executed, the sheriff or the First-tier Tribunal may make a time to pay order in respect of that debt only if less than 8 weeks of the period mentioned in subsection (3) of that section have expired.

• (6) Without prejudice to section 9(12) of this Act, interest payable under a decree for payment of a debt in respect of which a time to pay order has been made (other than interest awarded as a specific sum in the decree) shall not be recoverable by the creditor except in accordance with subsection (7) below.

• (7) A creditor who wishes to recover interest to which subsection (6) above applies shall serve a notice on the debtor not later than the date prescribed by Act of Sederunt or by rules made under section 68 or paragraph 4 of schedule 9 of the Tribunals (Scotland) Act 2014 occurring—