This is the initial step in the recovery process with exception of an arrestment authorised by an ordinary decree which does not require a charge to be served. This is a written, formal demand to the debtor to pay the full outstanding balance to you in fourteen days, with a warning that further enforcement will follow after that period.

The charge in itself does not enforce the court order but is useful in several aspects. It is served in person by a Sheriff Officer attending the debtor's home or place of business, allowing the officer to give a report on the likely recovery prospects and to legitimately gather information about the debtor's circumstances.

It is essential that a charge is served before an earnings arrestment or attachment is executed.

Arrestment (Bank Arrestment)

This method of enforcement would be appropriate if it was known that the debtor owned funds or goods that are in the possession of a third party. The most common example of this is money in a bank account. A schedule of arrestment is served upon the third party (known as the Arrestee). The arrestee freezes the sums held at credit of the account in excess of the protected limit which is currently £415.00. It should be noted that the arrestment applies only to funds at credit of an account at the time of the arrestment and not to funds subsequently paid into the account. Timing of an arrestment is essential. From a creditor's perspective the arrestment is best placed when it is known there will be funds in the account.

If the arrestment is successful the bank or other arrestee must intimate to the creditor what sums have been attached. There is no similar obligation if no funds are attached. Accordingly if a creditor does not hear from a bank the likelihood is that the arrestment has been unsuccessful. Any attached funds (or a lesser amount required to settle the debt and expenses)are automatically released to the creditor after 14 weeks unless a mandate has been signed authorising release of the arrested sums beforehand or alternatively due to an alternative arrangement the arrestment has been withdrawn. No prior charge is required for a bank arrestment on a Small Claim decree.

It should be noted that this type of arrestment attaches funds due to the debtor by any third party. Accordingly it is the appropriate diligence for such items as redundancy payments, fees due to the self-employed, insurance proceeds or sums due to sub-contractors as examples.

Earnings Arrestment?

Following service of the charge and after 14 days have elapsed, an earnings arrestment can be served on the debtor's employer (where that information is known).

Once served the arrestment requires the employer to remit a percentage of the debtor's earnings to you on every pay day. This earnings arrestment remains in effect until the debt is paid or the debtor leaves that employer. It should be noted that there must be an employer/employee relationship and it is not possible to arrest wages if the debtor is operating as a contractor or is self-employed. An arrestment would be required in these circumstances.

Attachment and Auction?

An attachment involves making an inventory of property belonging to the debtor with a view to selling it at auction. The inventory of "moveable" property belonging to the debtor is called attachment and can only be carried out after a charge has been served and the 14 day period has expired. In the first instance, attachment can only be carried out in relation to articles outside a "dwellinghouse.”. Items not physically within the house for example in a garage or other outhouse may be attached. Attachment is competent anywhere other than a dwellinghouse and this will cover a place of business, a workshop, office or other commercial premises.

Where the officer has carried out an attachment, the fee is based on the total value of the items included in the attachment. A report of the attachment is then made to the local Sheriff Court.

Following attachment the debtor may wish to pay by instalments. An arrangement can be accepted without prejudicing your right to proceed to auction. However, you may have to ask the court to extend the duration of the attachment which lasts for 6 months in the first instance. If the debt remains unpaid, the officer will proceed to arrange for the uplift of the attached articles for sale by public auction at an auction room. Following the sale a report is made to the auditor of court, the sheriff clerk, who then issues a certificate showing a balance of account.

Exceptional Attachment Order?

There may be circumstances where the creditor would wish to attach assets within a dwellinghouse for example where goods outwith a dwellinghouse cannot be attached or it is believed that there are goods of some value within a dwellinghouse. An exceptional attachment order authorises the valuation and uplift of goods within a dwellingplace. A charge has to be served in the first instance. The creditor must apply to the court for an exceptional attachment order. The debtor will have an opportunity to state their case at a court hearing prior to any order being granted. Before granting the order the sheriff has to consider a number of factors including whether there has been any payment agreement and whether the debtor has received money advice. The sheriff will also take into account whether other diligences have been attempted and whether sufficient will be realised from any attachment and auction to cover all of the expenses and a proportion of the debt itself. Once granted the exceptional attachment order does give officers authority to open and shut lockfast places. An exceptional attachment differs from an ordinary attachment in that the listed goods are uplifted immediately from the dwellinghouse with a view to their subsequent auction.

Money Attachment

Creditors can now attach money, including cash or cheques in the possession of the debtor. The one exclusion to this general rule is that money cannot be attached within a dwellinghouse

The procedure is fairly straightforward in that the Sheriff Officer will attend at the debtor’s premises, following expiry of a Charge for Payment and provision to the debtor of a Debt Advice Pack, and attach sufficient cash and/or cheques value to cover the debt plus costs. The money is immediately removed from the premises by the Officer and thereafter a Report of Money Attachment is made to the Sheriff within 14 days of the attachment. At this point the Creditor (not the officer) is required to make an application for a Payment Order authorising the Sheriff Officer to realise the value of the attached money including appointing the Officer as the irrevocable agent in relation to any cheques for the purpose of cashing these items. The Sheriff Officer then completes a Final Statement of Money Attachment within 14 days of funds being paid to the creditor or, if required, released back to debtor. Speak to an Officer before instructing this diligence as it may involve further charges.

A court can grant a time to pay direction (payment by instalments or deferred lump sum) at the time of granting a decree. The terms of the direction will be included in the decree. The court order cannot be enforced until the direction lapses.

The date on which the direction starts is when a copy of the decree is intimated or delivered to the debtor. It is important to have evidence that the decree has been intimated if there is any dispute as to the direction no longer being in force. You can send a copy direct to the debtor. We would recommend this is sent recorded delivery and that you retain a copy of the letter and the recorded delivery slip. If you wish, a Sheriff Officer can deliver a copy by post or in person for you. Once the direction has a start date you have to monitor the payments to calculate if or when it lapses. If payment is by instalments, the direction will lapse if an aggregate of two instalments is outstanding when the next one becomes due, or if payment is in one lump sum it will lapse 24 hours after the due date if any part of the balance is unpaid.

When the direction lapses, you can enforce recovery of the remaining balance. A Sheriff Officer will be unable to enforce the decree unless there is evidence that the time to pay direction has been intimated and that it has subsequently lapsed through missed payment.

Debt Arrangement Scheme

Application may be made by a debtor to the DAS Administrator (the Accountant in Bankruptcy) for the approval of a Debt Payment programme. Once approved the debtor will pay a set amount in specified periods to pay debts due to all creditors. While a Debt Programme is in force no diligence can be executed.