Bankruptcy and Diligence etc. (Scotland) Act 2007

• (iii) any third party who opposes the application,

an opportunity to make representations; or

• (b) holding a hearing.

• (9) Where the debtor or, as the case may be a third party, opposes the application on the ground that money attached is not owned by the debtor, it is for the debtor or the third party to prove that fact.

• (10) Where the sheriff is satisfied, after considering any opposition or on the sheriff's own initiative, that there has been a material irregularity in the execution of the money attachment, the sheriff must make an order such as is mentioned in subsection (11) below.

• (11) That order is an order—

• (a) declaring that the money attachment ceases to have effect; and

• (b) requiring the officer of court to return the money attached or, where the value of any such money has been realised, a sum equivalent to that value, to the debtor or, as the case may be, the person whose money it is.

• (12) Where the sheriff is satisfied after considering any opposition or on the sheriff's own initiative, that any money attached is not owned by the debtor—

• (a) the sheriff must make an order such as is mentioned in subsection (11) above restricted to that money; and

• (b) after the order is made, the officer of court may attach other money owned by the debtor and kept at the place at which the original money attachment was executed.

Effect of payment order

184

• (1) A payment order authorises the officer of court—

• (a) to realise the value of money attached; and

• (b) subject to section 37 of the 1985 Act (effect of sequestration on diligence), to dispose of the proceeds of the money attachment by—

• (i) retaining such amount as necessary to meet the fees and outlays of the officer;

• (ii) paying to the creditor the remainder of those proceeds so far as necessary to meet the sum recoverable by the money attachment; and

• (iii) paying to the debtor any surplus remaining.

• (2) For the purposes of subsection (1) above, the payment order authorises the officer of court—

• (a) to act as the irrevocable agent of the debtor in relation to any banking instrument attached; and

• (b) to take any of the steps mentioned in subsection (3) below.

• (3) Those steps are—

• (a) presenting the instrument for payment;

• (b) if instructed by the creditor to do so, raising any action for payment that would have been open to the debtor to raise against any person liable to honour the instrument;

• (c) except where the instrument is not negotiable, negotiating the instrument—

• (i) for value; or

• (ii) to the creditor for value credited against the sum recoverable by the money attachment;

• (d) any other steps the debtor could have taken in relation to the instrument before the money attachment was executed.

• (4) The officer of court must, in taking any of the steps referred to in subsection (3) above, obtain the highest amount for the instrument as is reasonably practicable.

• (5) In subsection (1)(b) above, “proceeds of the money attachment” includes any amount—

• (a) deposited in a bank account by virtue of section 181(6) or 185(4)(b)(iii) of this Act;

• (b) obtained as a result of taking any of the steps mentioned in subsection (3) above; and

• (c) received by the officer of court by virtue of section 191(2)(c) of this Act.

Release of money where attachment unduly harsh

185

• (1) The debtor may, before—

• (a) a payment order is made; or

• (b) the money attachment ceases to have effect,

apply to the sheriff for an order such as is mentioned in subsection (2) below.

• (2) That order is one—

• (a) providing that the money attachment ceases to have effect in relation to—

• (i) the money attached; or

• (ii) so much of it as the sheriff specifies; and

• (b) requiring the officer of court to return that money or, where the value of the money has been realised, a sum equivalent to that value, to the debtor.

• (3) Where the sheriff is satisfied that, in the circumstances, the money attachment is unduly harsh to the debtor, the sheriff must, subject to subsection (4) below, make an order such as is mentioned in subsection (2) above.

• (4) Where the value of the money attached exceeds £1,000 or such other amount as the Scottish Ministers may by regulations prescribe, the sheriff—

• (a) may not specify money the value of which exceeds that amount; and

• (b) may, where the money attached includes or comprises a banking instrument, authorise the officer of court to—

• (i) realise the value of the instrument;

• (ii) pay to the debtor from the money and, as the case may be, proceeds of that realisation the sum specified; and

• (iii) deposit any surplus remaining in a bank account.

• (5) In a case to which subsection (4)(b) above applies, the order under subsection (3) above authorises the officer of court—

• (a) to act as the irrevocable agent of the debtor in relation to the instrument; and

• (b) to take any of the steps mentioned in section 184(3) of this Act.

• (6) Subsection (4) of section 184 of this Act applies to any steps taken by virtue of subsection (5) above.

• (7) Where the amount realised under subsection (4)(b)(i) above is less than the amount specified, the order is to be deemed to have required the officer of court to pay the amount realised only.

Invalidity and cessation of money attachment

186

• (1) Where, at any time before a payment order is made or the money attachment ceases to have effect, the sheriff is satisfied that there has been a material irregularity in the execution of the money attachment, the sheriff must make an order such as is mentioned in subsection (2) below.

• (2) That order is an order—

• (a) declaring that the money attachment ceases to have effect; and

• (b) requiring the officer of court to return the money attached or, where the value of any such money has been realised, a sum equivalent to that value, to the debtor or, as the case may be, the person whose money it is.

• (3) Where, at any time before a payment order is made or the money attachment ceases to have effect, the sheriff is satisfied that any money attached is not owned by the debtor—

• (a) the sheriff must make an order such as is mentioned in subsection (2) above restricted to that money; and

• (b) after the order is made, the officer of court may attach other money owned by the debtor and kept at the place at which the original money attachment was executed.

• (4) An order under this section may be made—

• (a) on the application of—

• (i) the debtor; or

• (ii) a third party claiming an interest; or

• (b) on the sheriff's own initiative.

• (5) Where such an order is made on the sheriff's own initiative, the sheriff clerk must intimate the order to—

• (a) the debtor;

• (b) the creditor;

• (c) the officer of court; and

• (d) any other person the sheriff thinks has an interest.

• (6) The sheriff may not make an order under this section without first—

• (a) giving—

• (i) the debtor;

• (ii) the creditor; and

• (iii) any other person the sheriff thinks has an interest,

an opportunity to make representations; or

• (b) holding a hearing.

• (7) The sheriff must give reasons for making, or refusing to make, an order under this section.

Termination of money attachment

187

• (1) A money attachment ceases to have effect on the expiry of the period of 14 days beginning with the day on which the report of money attachment is made unless, within that period, the creditor—

• (a) applies for a payment order; and

• (b) sends a copy of the application to the officer of court under section 183(4)(b) of this Act.

• (2) A money attachment ceases to have effect if the sum recoverable by the money attachment is—

• (a) paid to—

• (i) the creditor;

• (ii) the officer of court; or

• (iii) any other person who has authority to receive payment on behalf of the creditor; or

• (b) tendered to any of those persons and the tender is not accepted within a reasonable time.

• (3) Where a money attachment ceases to have affect by virtue of subsection (1) or (2) above, the officer of court must return money attached or, where the value of any such money has been realised, a sum equivalent to that value, to the debtor.

Redemption of banking instrument

188

• (1) The debtor may, before the expiry of the period of 14 days beginning with the date on which the report of money attachment is made, redeem a banking instrument attached by the money attachment.

• (2) The debtor may not redeem an instrument in relation to which an order under section 181(3) of this Act has been made.

• (3) The amount for which such an instrument may be redeemed is the value of the instrument specified in the report of money attachment.

• (4) The officer of court must, on receiving payment from the debtor for the redemption of an attached instrument—

• (a) grant a receipt in (or as nearly as may be in) the form prescribed by Act of Sederunt to the debtor; and

• (b) report the redemption to the sheriff as soon as is reasonably practicable.

• (5) The money attachment ceases, on the grant of such a receipt, to have effect in relation to the redeemed instrument.

Statement of money attachment

Final statement of money attachment

189

• (1) The officer of court must, before the expiry of the period of 14 days beginning with the day mentioned in subsection (2) below, give a statement to the sheriff.

• (2) The day referred to in subsection (1) above is the day on which—

• (a) the officer of court made payment to the creditor under a payment order; or

• (b) the money attached (or the last part of it) was returned to the debtor or, as the case may be, a third party by virtue of section 182(6), 183(11), 185(3), 186, 187 or 188 of this Act,

whichever is the later.

• (3) The statement mentioned in subsection (1) above must be—

• (a) in (or as nearly as may be in) the form prescribed by Act of Sederunt; and

• (b) signed by the officer of court.

• (4) The statement must specify—

• (a) any banking instruments, the values of which have been realised;

• (b) the value realised in respect of each such instrument;

• (c) any sums paid by the debtor to account of the sum recoverable by the money attachment;

• (d) any chargeable expenses;

• (e) any sums paid to the creditor;

• (f) any surplus paid or instruments returned to the debtor or, as the case may be, a third party; and

• (g) any balance due by or to the debtor.

• (5) The statement must contain a declaration by the officer of court that all the information contained within it is, to the best of the officer's knowledge, true.

• (6) If the officer of court—

• (a) without reasonable excuse gives the statement after the expiry of the period mentioned in subsection (1) above; or

• (b) wilfully refuses to make, or delays making, the statement after the expiry of that period,

the sheriff may make an order providing that the officer is liable for the chargeable expenses, either in whole or in part.

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Audit of final statement under section 189(1)

190

• (1) The sheriff must remit the statement under section 189(1) to the auditor of court who must—

• (a) tax the chargeable expenses;

• (b) certify any balance due by or to the debtor; and

• (c) make a report to the sheriff.

• (2) The auditor of court must not alter the statement without first giving all interested persons an opportunity to make representations.

• (3) The auditor of court must not charge a fee in respect of the report made under subsection (1)(c) above.

• (4) On receipt of a report made under subsection (1)(c) above the sheriff must make an order—

• (a) declaring the balance due by or to the debtor, as certified by the auditor of court;

• (b) declaring such a balance after making modifications to the balance so certified; or

• (c) where the sheriff is satisfied that there has been a material irregularity in the execution of the money attachment (other than the timing of the statement under section 189(1) of this Act), declaring the attachment void.

• (5) An order under subsection (4)(c) above may make such consequential provision as the sheriff thinks fit.

• (6) An order under subsection (4)(c) above does not affect the title of a person to any money acquired by that person in good faith.

• (7) The sheriff may not make an order under subsection (4)(b) or (c) above without first—

• (a) giving—

• (i) the debtor;

• (ii) the creditor; and

• (iii) any third party who claims ownership (whether alone or in common with the debtor or any other person) of any money attached,

an opportunity to make representations; or

• (b) holding a hearing.

• (8) The sheriff clerk must intimate the sheriff's order under subsection (4) above to the persons mentioned in subsection (7)(a) above.

General and miscellaneous

Money in common ownership

191

• (1) Money which is owned in common by a debtor and a third party may be attached in satisfaction of the debts of the debtor.

• (2) Where at any time before the disposal of attached money—

• (a) a third party claims to own the money in common with the debtor;

• (b) either—

• (i) the officer of court is satisfied that the claim is valid; or

• (ii) the sheriff, on the third party's application, makes an order stating that the sheriff is so satisfied; and

• (c) the third party pays to the officer a sum equal to the value of the debtor's interest in the money,

the debtor's interest in the money is transferred to the third party.

• (3) Where the sheriff is satisfied—

• (a) that money attached is owned in common by the debtor and a third party; and

• (b) that the disposal of the money would in the circumstances be unduly harsh to the third party,

the sheriff may, on the third party's application made before the money's disposal, order that the money attachment is to cease to have effect in relation to that money.

• (4) Where—

• (a) the debtor's interest in money owned in common by the debtor and a third party is, under subsection (2) above, transferred to the third party; or

• (b) the money attachment ceases, in pursuance of an order made under subsection (3) above, to have effect in relation to that money,

the officer of court may attach other money owned by the debtor and kept at the place at which the original money attachment was executed.

• (5) In this section and in section 192 of this Act, references to the “disposal” of attached money (and to cognate expressions) are to be construed as references to the value of that money being realised by virtue of—

• (a) an order under section 181 of this Act; or

• (b) a payment order.

Procedure where money owned in common is disposed of

192

• (1) This section applies where—

• (a) a third party claimed, before attached money was disposed of, to own the money in common with the debtor;

• (b) the debtor's interest in the money has not transferred to the third party under section 191(2) of this Act;

• (c) the money attachment has not, by virtue of an order under section 191(3) of this Act, ceased to have effect in relation to that money;

• (d) the third party's interest in the money has, on the disposal of the money, been—

• (i) transferred to another person; or

• (ii) extinguished by virtue of the disposal; and

• (e) either—

• (i) the third party's claim is, after that disposal, admitted by the creditor and the debtor; or

• (ii) where the third party's claim is not so admitted, the sheriff, on an application by the third party after that disposal, is satisfied that the claim is valid.

• (2) The creditor must pay to the third party a sum equal to the fraction of the value of the money which corresponded to the third party's interest in it.

Unlawful acts after money attachment

193

• (1) This section applies where—

• (a) a money attachment has been executed; and

• (b) the debtor—

• (i) realises (or purports to realise) the value of an attached banking instrument;

• (ii) otherwise relinquishes ownership of such an instrument; or

• (iii) obtains (or attempts to obtain), by fraud or other dishonest means, a banking instrument in place of such an instrument.

• (2) The debtor is acting in breach of the money attachment.

• (3) A person who—

• (a) assists a debtor to do anything mentioned in subsection (1)(b) above; and

• (b) knows (or ought reasonably to know) that a money attachment has been executed against the debtor,

is acting in breach of the money attachment.

• (4) A breach of the money attachment under subsection (2) or (3) above may be dealt with as a contempt of court.

Appeals

194

• (1) Subject to subsection (2) below, an appeal against any decision of the sheriff made under this Part of this Act may be made only—

• (a) to the sheriff principal;

• (b) with the leave of the sheriff; and

• (c) on a point of law.

• (2) This section does not apply to decisions made under section 181(3) of this Act.

• (3) The decision of the sheriff principal on such an appeal is final.

Recovery from debtor of expenses of money attachment

195

• (1) Expenses which, in accordance with schedule 3 to this Act, are chargeable against the debtor are to be recoverable from the debtor by the money attachment but not by any other legal process.

• (2) Where any expenses such as are mentioned in subsection (1) above have not been recovered by the time the proceeds of the money attachment are disposed of under a payment order, or the money attachment otherwise ceases to have effect, they cease to be chargeable against the debtor.

• (3) The sheriff must grant decree for payment of any expenses awarded by the sheriff against the debtor in favour of the creditor under paragraph 4 of schedule 3 to this Act.

• (4) Subsection (5) below applies where a money attachment is—

• (a) in effect immediately before the date of sequestration (within the meaning of the Bankruptcy (Scotland) Act 2016) of the debtor's estate;

• (b) in effect immediately before the appointment of an administrator under Part II of the Insolvency Act 1986 (c. 45), in relation to the debtor;

• (c) in effect against property of the debtor immediately before a floating charge attaches to all or part of that property under section 53(7) (attachment on appointment of receiver by holder of charge) or 54(6) (attachment on appointment of receiver by court) of that Act of 1986;

• (d) in effect immediately before the commencement of the winding up, under Part IV or V of that Act of 1986, of the debtor; or

• (e) rendered unenforceable by virtue of the creditor entering into a composition contract or acceding to a trust deed for creditors or by virtue of the subsistence of a protected trust deed within the meaning of Schedule 5 to that Act of 2016.

• (5) Where this subsection applies—

• (a) the expenses of the money attachment which were chargeable against the debtor remain so chargeable; and

• (b) if the debtor's obligation to pay the expenses is not discharged under or by virtue of the sequestration, administration order, receivership, winding up, composition contract or trust deed, those expenses are recoverable by further money attachment.

Liability for expenses of money attachment

196

• (1) Schedule 3 to this Act has effect for the purposes of determining the liability, as between the creditor and the debtor, for expenses incurred in serving a charge and in the process of money attachment.

• (2) The Scottish Ministers may by order modify that schedule so as to—

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

• (b) vary any of the descriptions of the types of expenses referred to in it.

Ascription

197

• (1) This section applies where any sums are—

• (a) attached by a money attachment; or

• (b) paid to account of the sum recoverable by that attachment while it is in effect.

• (2) Such sums are to be ascribed to the following in the order in which they are mentioned—

• (a) the expenses which are chargeable against the debtor incurred in the money attachment;

• (b) any interest which has accrued, at the day on which the money attachment was executed, on the sum for payment for which the charge was served;

• (c) any sum for payment of which that charge was served together with such interest as has accrued after the day the money attachment was executed.

Interpretation

198

• (1) In this Part—

• “decree” has the meaning given by section 221 of this Act, being a decree which, or an extract of which, authorises money attachment;

• “document of debt” has the meaning given by section 221 of this Act, being a document which, or an extract of which, authorises money attachment;

• “dwellinghouse” has the same meaning as in section 45 of the 2002 Act;

• ...

• “money” has the meaning given by section 175 of this Act;

• “ officer of court ” means the officer of court appointed by the creditor;

• “payment order” has the meaning given by section 183(2) of this Act;

• “schedule of money attachment” has the meaning given by section 179(1) of this Act; and

• “sum recoverable by the money attachment” has the meaning given by section 177(1) of this Act.

• (2) The Scottish Ministers may by order modify the definitions of “decree” and “document of debt” in subsection (1) above by—

• (a) adding types of decree or document to;

• (b) removing types of decree or document from; or

• (c) varying the description of,

the types of decree or document to which those definitions apply.

• (3) Where—

• (a) a schedule, report or statement under this Part of this Act requires to be signed; and

• (b) provision is made by virtue of this Part of this Act or by any other enactment permitting the schedule, report or statement to be an electronic communication,

the requirement is satisfied by a certified electronic signature.

Part 9 — Diligence against earnings

Simultaneous operation of arrestments against earnings where net earnings insufficient

199

• (1) In section 58 of the 1987 Act (simultaneous operation of earnings arrestment and current maintenance arrestment), for subsection (2) substitute—

(2) If on any pay-day N is less than S, the employer shall operate both the earnings arrestment and the current maintenance arrestment in accordance with subsection (3) below. (3) The employer shall— (a) for the purposes of section 47(1) of this Act, deduct the sum equal to— $N×ES$ ; and (b) for the purposes of section 51(1) of this Act, deduct the sum equal to— $N×CS$ . (4) In subsections (2) and (3) above— - N is the amount of any net earnings in so far as they exceed the sum mentioned in subsection (2)(b) of section 53 of this Act for the number of days mentioned in subsection (2)(a) of that section; - E is the sum which the employer is required to deduct under section 47(1) of this Act; - C is the sum which the employer is required to deduct under section 51(1) of this Act; and - S is the total of E and C.

• (2) In section 63(5)(b) of that Act (sum payable under conjoined arrestment order including both ordinary debts and current maintenance), for “all the debts were current maintenance” substitute “ the only debts were the current maintenance debts ”.

• (3) In Schedule 3 to that Act (disbursement under conjoined arrestment order)—

• (a) in paragraph 4, for the words from “priority” to the end substitute “ disbursement shall be in accordance with paragraph 4A below. ”; and

• (b) after that paragraph, insert—

(4A) Where— (a) only one of the debts is an ordinary debt, the creditor in that debt shall be paid the sum equal to— $D×ES$ ; (b) more than one of the debts is an ordinary debt, each of the creditors in those debts, out of the sum mentioned in sub-paragraph (a) above, shall be paid the same proportion of the amount of that creditor's debt; (c) only one of the debts is current maintenance, the creditor in that debt shall be paid the sum equal to— $D×CS$ ; (d) more than one of the debts is current maintenance, each of the creditors in those debts, out of the sum mentioned in sub-paragraph (c) above, shall be paid the same proportion of the amount of that creditor's debt, where— - D is the sum deducted under subsection (5) of section 63 of this Act; - E is the sum deducted under paragraph (a) of that subsection; - C is the sum which would, if the only debts were the current maintenance debts, be deducted under subsection (3) of that section; and - S is the total of E and C.

Arrestment of earnings: deductions from holiday pay

200

• (1) In section 47(1) of the 1987 Act (general effect of earnings arrestment), after “section 49” insert “ or 49A ”.

• (2) In section 49(1) of that Act (method of calculating deduction from earnings), at the beginning insert “ Subject to section 49A of this Act, ”.

• (3) After section 49 of that Act, insert—

(49A) (1) This section applies where— (a) the debtor's earnings are paid at regular intervals; and (b) on one pay-day (in this section, the “normal pay-day”) there are paid to the debtor both— (i) earnings normally payable on that pay-day (in this section, “normal earnings”); and (ii) earnings such as are mentioned in subsection (2) below (in this section, “holiday pay”). (2) Holiday pay is earnings which— (a) are paid in respect of a period of annual leave or public holiday; and (b) would, were they not paid in respect of such leave or holiday, have been paid on a pay-day other than the normal pay-day. (3) In arriving at the sum to be deducted under section 47 of this Act on the normal pay-day, subsections (4) to (8) below shall apply. (4) Calculate in accordance with section 49 of this Act the sum, if any, which would be deducted from the normal earnings if the holiday pay had not been paid on the normal pay-day. (5) Where— (a) the debtor's normal earnings are payable weekly, monthly or at regular intervals of a whole number of weeks or months; and (b) all of the holiday pay relates to a whole number of weeks or months, the sum, if any, to be deducted from the holiday pay shall be the sum arrived at by applying sub-paragraphs (i) to (iii) of section 49(1)(c) of this Act to the holiday pay as if it were the net earnings mentioned in that sub-paragraph (i). (6) Where the debtor's normal earnings are payable weekly, monthly or at regular intervals of a whole number of weeks or months but part of the holiday pay relates to a whole number of weeks or months and part does not, the sum, if any, to be deducted from the holiday pay shall be the sum arrived at by— (a) in relation to the part of the holiday pay which relates to a whole number of weeks or months, applying subsection (5) above to that part; (b) in relation to the part of the holiday pay which does not relate to a whole number of weeks or months, applying paragraphs (a) to (c) of section 49(2) of this Act to that part of the holiday pay as if it were the net earnings mentioned in that paragraph (a); and (c) aggregating the sums arrived at as mentioned in paragraphs (a) and (b) above. (7) Where— (a) the debtor's normal earnings are payable weekly, monthly or at regular intervals of a whole number of weeks or months but none of the holiday relates to such a whole number of weeks or months; or (b) the debtor's normal earnings are payable at regular intervals other than at intervals to which paragraph (a) above applies, the sum, if any, to be deducted from the holiday pay shall be arrived at by applying paragraph (b) of subsection (6) above to the holiday pay. (8) Aggregate— (a) the deduction, if any, calculated under subsection (4) above; and (b) the deduction, if any, calculated under subsection (5), (6) or, as the case may be, (7) above.

Provision of debt advice and information package

201

• (1) In section 47 of the 1987 Act (general effect of earnings arrestment)—

• (a) in subsection (2)(a), after “shall” insert “ , subject to subsection (3) below, ”; and

• (b) after subsection (2) insert—

(3) An earnings arrestment shall not come into effect unless, no earlier than 12 weeks before the date on which the earnings arrestment schedule is served, the creditor has provided the debtor with a debt advice and information package. (4) In this section and in sections 51(2A) and 60(3A) of this Act, “debt advice and information package” means the debt advice and information package referred to in section 10(5) of the Debt Arrangement and Attachment (Scotland) Act 2002 (asp 17).

• (2) In section 51 of that Act (general effect of current maintenance arrestment)—

• (a) in subsection (2)(a), after “shall” insert “ , subject to subsection (2A) below, ”; and

• (b) after subsection (2) insert—

(2A) A current maintenance arrestment shall not come into effect unless, no earlier than 12 weeks before the date on which the current maintenance arrestment schedule is served, the creditor has provided the debtor with a debt advice and information package.

• (3) In section 60 of that Act (conjoined arrestment orders), after subsection (3) insert—

(3A) It shall not be competent to make a conjoined arrestment order unless, no earlier than 12 weeks before the date of the application under subsection (2) above, the creditor has provided the debtor with a debt advice and information package.

• (4) In section 73(1) of that Act (interpretation), after the definition of “current maintenance” insert—

“debt advice and information package” has the meaning given by section 47(4) of this Act;

Intimation of arrestment schedule

202

• (1) Section 70 of the 1987 Act is amended as follows.

• (2) In subsection (1), for the words “, if reasonably practicable,” substitute “ take all reasonably practicable steps to ”.

• (3) After subsection (4), insert—

(4A) An employer on whom an earnings arrestment schedule or a current maintenance arrestment schedule is served shall, as soon as is reasonably practicable— (a) intimate a copy of it to the debtor; and (b) notify the debtor of— (i) the date on which the first deduction is made; and (ii) the sum so deducted. (4B) An employer on whom a copy of a conjoined arrestment order is served shall, as soon as is reasonably practicable, notify the debtor of the matters mentioned in sub-paragraphs (i) and (ii) of subsection (4A)(b) above.

Provision of information

203

After section 70 of the 1987 Act, insert—

(70A) (1) Where an employer receives, in relation to a debtor— (a) an earnings arrestment schedule; (b) a current maintenance arrestment schedule; or (c) a copy of a conjoined arrestment order, the employer shall, as soon as is reasonably practicable, send to the creditor or, in the case of a conjoined arrestment order, the sheriff clerk, the information mentioned in subsection (3) below. (2) The employer shall, provided the debt has not been extinguished, send, on or as soon as is reasonably practicable after the dates mentioned in subsection (4) below, to the creditor or, as the case may be, the sheriff clerk the information mentioned in subsection (3) below. (3) The information referred to in subsection (1) above is— (a) how the debtor is paid (whether weekly, monthly or otherwise); (b) the date of the debtor's pay-day next following— (i) where subsection (1) above applies, receipt of the schedule or order; or (ii) where subsection (2) above applies, the date mentioned in subsection (4) below; (c) the sum deducted on that pay-day and the net earnings from which it is so deducted; and (d) any other information which the Scottish Ministers may, by regulations, prescribe. (4) The dates referred to in subsection (2) above are— (a) the later of— (i) 6 April next following receipt of the schedule or order; or (ii) the day falling 6 months after receiving the schedule or order; and (b) each 6 April thereafter. (5) Notwithstanding subsections (1) and (2) above, the employer shall, if the debtor ceases for whatever reason to be employed by the employer, give notice, as soon as is reasonably practicable, to the creditor or, as the case may be, the sheriff clerk— (a) of that fact; and (b) in so far as is known to the employer, the name and address of any new employer of the debtor. (6) Where an employer sends information under subsection (1) or (2) above or gives notice under subsection (5) above, the employer shall, as soon as is reasonably practicable, send a copy of that information or notice to the debtor. (70B) (1) Where an employer fails without reasonable excuse to give notice under section 70A(5) of this Act, the sheriff may, on the application of any creditor, make an order requiring the employer— (a) to provide such information as is known to the employer as to the debtor's employment after ceasing to be employed by that employer; (b) to pay to the creditor an amount not exceeding twice the sum which the employer would have been required to deduct on the debtor's next pay-day had the debtor still been employed by that employer. (2) Where a sum is paid by virtue of an order under subsection (1)(b) above— (a) the debt owed by the debtor to the creditor shall be reduced by that sum; and (b) the employer shall not be entitled to recover that sum from the debtor. (3) An employer aggrieved by an order under subsection (1) above may, before the expiry of the period of 14 days beginning with the day on which the order is made, appeal, on point of law only, to the sheriff principal, whose decision shall be final. (70C) (1) A creditor who is receiving payment from a debtor by virtue of— (a) an earnings arrestment; (b) a current maintenance arrestment; or (c) a conjoined arrestment order, shall, provided the debt has not been extinguished, send, on or as soon as is reasonably practicable after the dates mentioned in subsection (2) below, to the employer or, in the case of a conjoined arrestment order, the sheriff clerk the information mentioned in subsection (3) below. (2) The dates referred to in subsection (1) above are— (a) the later of— (i) 6 April next following service of the schedule of arrestment or, as the case may be, order; or (ii) the day falling 6 months after the service of the schedule or order; and (b) each 6 April thereafter. (3) The information referred to in subsection (1) above is— (a) the sum owed by the debtor to the creditor; (b) the amounts received by the creditor by virtue of the arrestment or order; and (c) the dates of payment of those amounts. (70D) Where a debtor ceases to be employed by an employer who is deducting sums under this Part of this Act, the debtor shall give notice to the creditor or, where those sums are being deducted by virtue of a conjoined arrestment order, the sheriff clerk— (a) of that fact; and (b) of the name and address of any new employer.

Conjoined arrestment orders: jurisdiction

204

In section 73(1) of the 1987 Act (interpretation of Part 3 of that Act), in paragraph (c) of the definition of “sheriff”, for the words from “the” where it second occurs to the end substitute—

(i) the place where the debtor is principally employed; (ii) where that place is outside Scotland, any other place where the debtor is employed; or (iii) where neither sub-paragraph (i) nor sub-paragraph (ii) above applies, the place where the debtor is domiciled.

Arrestment of seamen's wages

205

In section 73 of the 1987 Act (interpretation of Part 3 of that Act), subsections (3)(c) and (4) are repealed.

Part 10 — Arrestment in execution and action of furthcoming

Arrestment in execution

206

After section 73 of the 1987 Act, insert—

(73A) (1) Arrestment and action of furthcoming or sale shall be competent only in execution of— (a) subject to subsection (2) below, a decree; or (b) a document of debt. (2) Arrestment and action of furthcoming or sale in execution of a summary warrant shall be competent only if— (a) the debtor has been charged to pay the debt due by virtue of the summary warrant; and (b) the period for payment specified in the charge has expired without payment being made. (3) Any rule of law, having effect immediately before the coming into force of this section, as to the decrees or documents on which arrestment and action of furthcoming or sale can proceed shall, in so far as inconsistent with this section, cease to have effect. (4) In this Part of this Act— - “decree” means— 1. a decree of the Court of Session, of the High Court of Justiciary or of the sheriff; 2. a decree of the Court of Teinds; 3. a summary warrant; 4. 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; 5. 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; 6. a warrant granted, in criminal proceedings, for enforcement by civil diligence; or 7. a liability order within the meaning of section 33(2) of the Child Support Act 1991 (c. 48), - “document of debt” means— 1. a document registered for execution in the Books of Council and Session or the sheriff court books; or 2. a document or settlement which by virtue of an Order in Council under section 13 of the Civil Jurisdiction and Judgments Act 1982 (c. 27) is enforceable in Scotland, (5) The Scottish Ministers may, by order, modify the definitions of “decree” and “document of debt” in subsection (4) 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. (73B) (1) This section applies where a creditor arrests in execution of — (a) a decree and the creditor has not executed an arrestment on the dependence of the action; or (b) a document of debt. (2) The schedule of arrestment used in executing the arrestment shall be in (or as nearly as may be in) the form prescribed by the Scottish Ministers by regulations. (73C) (1) This section applies where a creditor obtains a decree (in this Part of this Act referred to as a “final decree”) in an action on the dependence of which the creditor has executed an arrestment. (2) The creditor shall, as soon as reasonably practicable, serve a copy of that final decree, in (or as nearly as may be in) the form prescribed by Act of Sederunt, on the arrestee. (73D) (1) This section applies where— (a) a creditor— (i) obtains a final decree in an action on the dependence of which the creditor has executed an arrestment; or (ii) arrests in execution of a decree or document of debt; and (b) the debtor is an individual. (2) The creditor shall, during the period of 48 hours beginning with the time at which the copy of the final decree is served under section 73C(2) of this Act or, as the case may be, the time at which the schedule of arrestment is served, provide the debtor with a debt advice and information package. (3) Where the creditor fails to comply with subsection (2) above, the arrestment shall cease to have effect or, as the case may be, shall be incompetent. (4) In this section, “debt advice and information package” has the meaning given by section 47(4) of this Act. (73E) (1) Subsections (2) to (5) below apply— (a) where a creditor arrests in execution of — (i) a decree and the creditor has not executed an arrestment on the dependence of the action; or (ii) a document of debt; and (b) only to the extent that the arrestee holds funds due to the debtor the value of which, at the time the arrestment is executed, is or can be ascertained (whether or not that arrestee also holds other moveable property of the debtor). (2) Subject to subsection (4) below and to section 73F of this Act, the funds mentioned in subsection (1)(b) above attached by the arrestment shall be the lesser of— (a) the sum due by the arrestee to the debtor; or (b) the aggregate of— (i) the principal sum, in relation to which the decree or document is executed, owed by the debtor to the creditor; (ii) any judicial expenses chargeable against the debtor by virtue of the decree; (iii) the expenses of executing the arrestment; (iv) interest on the principal sum up to and including the date of service of the schedule of arrestment; (v) the interest on the principal sum which would be accrued in the period of 1 year beginning with the day after the date mentioned in sub-paragraph (iv) above; (vi) any interest on the expenses of executing the arrestment which is chargeable against the debtor; and (vii) any sum prescribed under subsection (3) below. (3) The Scottish Ministers may, by regulations, prescribe a sum which appears to them to be reasonable having regard to the average expenses likely to be incurred and chargeable against a debtor in a typical action of furthcoming. (4) Where— (a) the arrestee holds both funds due to and other moveable property of the debtor; and (b) the sum mentioned in paragraph (b) of subsection (2) above exceeds the sum mentioned in paragraph (a) of that subsection, the arrestment shall, in addition to the funds equal to the sum mentioned in that paragraph (a), attach the whole moveable property so held. (5) Except as provided for in subsection (4) above, an arrestment to which this section applies shall not attach any moveable property of the debtor other than the sum attached under subsection (2) above. (6) Where, in a case to which subsections (2) to (5) above apply— (a) in addition to the funds mentioned in subsection (1)(b) above, the arrestee holds funds due to the debtor the value of which is not or cannot be ascertained; and (b) the sum mentioned in paragraph (a) of subsection (2) above exceeds the sum mentioned in paragraph (b) of that subsection, the arrestment shall not attach any of the funds mentioned in paragraph (a) above. (73F) (1) Subject to subsection (2) below, this section applies where— (a) a creditor arrests— (i) in pursuance of a warrant granted for diligence on the dependence of an action; or (ii) in execution of a decree or document of debt; (b) the arrestment attaches funds standing to the credit of a debtor in an account held by a bank or other financial institution; and (c) the debtor is an individual. (2) This section does not apply where the account is— (a) held in the name of a company, a limited liability partnership, a partnership or an unincorporated association; or (b) operated by the debtor as a trading account. (3) The arrestment shall— (a) in a case where the sum standing to the credit of the debtor exceeds the sum mentioned in subsection (4) below, attach only the balance above that sum; and (b) in any other case, attach no funds. (4) The sum referred to in subsection (3)(a) above is the sum first mentioned in column 1 of Table B in Schedule 2 to this Act (being the sum representing the net monthly earnings from which no deduction would be made under an earnings arrestment were such an arrestment in effect). (5) In subsection (1) above, “bank or other financial institution” means— (a) the Bank of England; (b) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 (c. 8) to accept deposits; (c) an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to that Act which has permission under paragraph 15 of that schedule (as a result of qualifying for authorisation under paragraph 12 of that schedule) to accept deposits; or (d) a person who is exempt from the general prohibition in respect of accepting deposits as a result of an exemption order made under section 38(1) of that Act, and the expressions in this definition shall be read with section 22 of that Act, any relevant order made under that section and Schedule 2 to that Act. (6) The Scottish Ministers may, by regulations— (a) modify subsection (2) above so as to— (i) add or remove types of account to or, as the case may be, from those referred to in that paragraph; or (ii) vary any of the descriptions of the types of account there referred to; and (b) modify the definition of “bank or other financial institution” in subsection (5) above so as to— (i) add or remove types of financial institution to or, as the case may be, from those referred to in that provision; or (ii) vary any of the descriptions of the types of institution there referred to. (73G) (1) This section applies where a creditor arrests— (a) in pursuance of a warrant granted for diligence on the dependence of an action; or (b) in execution of a decree or document of debt. (2) The arrestee shall, before the expiry of the period mentioned in subsection (3) below, send to the creditor in (or as nearly as may be in) the form prescribed by the Scottish Ministers by regulations, the information mentioned in subsection (4) below. (3) The period referred to in subsection (2) above is the period of 3 weeks beginning with the day on which the arrestment is executed. (4) The information referred to in subsection (2) above is— (a) where any property, other than funds due to the debtor, is attached— (i) the nature of that property; and (ii) the value of it in so far as known to the arrestee; and (b) where any such funds are attached, the nature and value of those funds. (5) The arrestee shall, at the same time as sending, under subsection (2) above, the information to the creditor, send a copy of it to— (a) the debtor; and (b) in so far as known to the arrestee, any person— (i) who owns or claims to own attached property; or (ii) to whom attached funds are or are claimed to be due, solely or in common with the debtor. (73H) (1) Where an arrestee fails without reasonable excuse to send the prescribed form under section 73G(2) of this Act, the sheriff may, on the application of the creditor, make an order requiring the arrestee to pay to the creditor— (a) the sum due to the creditor by the debtor; or (b) the sum mentioned in section 73F(4) of this Act, whichever is the lesser. (2) Where the arrestee fails to send the prescribed form in relation to an arrestment on the dependence of an action, the sheriff— (a) may not make an order under subsection (1) above until the creditor has served a copy of the final decree under section 73C(2) above; and (b) may deal with the failure as a contempt of court. (3) Where a sum is paid by virtue of an order under subsection (1) above— (a) the debt owed by the debtor to the creditor shall be reduced by that sum; and (b) the arrestee shall not be entitled to recover that sum from the debtor. (4) An arrestee aggrieved by an order under subsection (1) above may, before the expiry of the period of 2 weeks beginning with the day on which the order is made, appeal, on point of law only, to the sheriff principal, whose decision shall be final. (73J) (1) This section applies where— (a) a creditor— (i) obtains a final decree in an action on the dependence of which the creditor has executed an arrestment; or (ii) arrests in execution of a decree or document of debt; and (b) the arrestment attaches funds which are due to the debtor (whether or not it also attaches other moveable property of the debtor). (2) Subject to section 73L of this Act, the arrestee— (a) shall, on the expiry of the period mentioned in subsection (3) below, release to the creditor, from the attached funds, a sum calculated in accordance with section 73K of this Act; and (b) may, where a mandate authorises the arrestee to do so, release that sum before the expiry of that period. (3) The period referred to in subsection (2) above is the period of 14 weeks beginning with the date of service of a copy of the final decree under section 73C(2) of this Act or, as the case may be, the date of service of the schedule of arrestment. (4) In this section and in sections 73K to 73P of this Act, references to funds or sums due to or by any person do not include references to funds or sums due in respect of future or contingent debts. (73K) The sum released under section 73J(2) of this Act is the lowest of— (a) the sum attached by the arrestment; (b) the sum due by the arrestee to the debtor; or (c) the aggregate of— (i) the principal sum, in relation to which the decree or document is executed or, as the case may be, which is decerned for in the final decree, owed by the debtor to the creditor; (ii) any judicial expenses chargeable against the debtor by virtue of the decree or final decree; (iii) the expenses of executing the arrestment; (iv) interest on the principal sum up to and including the date of service of the schedule of arrestment or, as the case may be, the date of the final decree; (v) the interest on the principal sum which would be accrued in the period beginning with the day after the date mentioned in sub-paragraph (iv) above and ending on the day on which the funds are released under section 73J(2) of this Act; and (vi) any interest on the expenses of executing the arrestment which is chargeable against the debtor. (73L) (1) No funds may be released under section 73J(2) of this Act where— (a) a person mentioned in subsection (2) below applies, by notice of objection, to the sheriff under section 73M(1) of this Act; (b) the debtor applies to the sheriff under section 73Q(2) of this Act; (c) an action of multiplepoinding is raised in relation to the funds attached by the arrestment; or (d) the arrestment is— (i) recalled; (ii) restricted; or (iii) otherwise ceases to have effect. (2) The persons referred to in subsection (1)(a) above are— (a) the debtor; (b) the arrestee; and (c) any other person to whom the funds are due solely or in common with the debtor (in this section and in sections 73M and 73N of this Act, the “third party”). (73M) (1) Where section 73J of this Act applies— (a) the debtor; (b) the arrestee; or (c) a third party, may, by notice of objection, apply to the sheriff for an order recalling or restricting the arrestment. (2) The notice of objection referred to in subsection (1) above shall— (a) be in (or as nearly as may be in) the form prescribed by Act of Sederunt; (b) be given to the persons mentioned in subsection (3) below before the expiry of the period of 4 weeks beginning with the date of service of a copy of the final decree under section 73C(2) of this Act or, as the case may be, the date of service of the schedule of arrestment; and (c) specify one or more of the grounds of objection mentioned in subsection (4) below. (3) The persons referred to in subsection (2)(b) above are— (a) the creditor; (b) the sheriff clerk; (c) the debtor or, as the case may be, the arrestee; and (d) in so far as known to the person objecting, any third party. (4) The grounds of objection referred to in subsection (2)(c) above are— (a) the warrant in execution of which the arrestment was executed is invalid; (b) the arrestment has been executed incompetently or irregularly; (c) the funds attached are due to the third party solely or in common with the debtor. (5) Where a person applies by notice of objection under subsection (1) above, that person may not, subject to subsection (6) below, raise— (a) an action of multiplepoinding; or (b) subject to subsection (7) below, any other proceedings, in relation to the funds attached. (6) Subsection (5) above is without prejudice to the right of the person— (a) to enter any such action or proceedings raised by any other person; and (b) to raise such an action or proceedings where the sheriff makes, under section 73N(5) of this Act, an order sisting the proceedings on the objection. (7) A debtor who applies by notice of objection under subsection (1) above may apply to the sheriff under section 73Q(2) of this Act and, in such a case, the sheriff may deal with both applications at one hearing. (73N) (1) Subject to subsection (5) below, before the expiry of the period of 8 weeks beginning with the day on which an application by notice of objection is made under section 73M(1) of this Act, the sheriff shall hold a hearing to determine the objection. (2) At the hearing under subsection (1) above, the sheriff shall not make any order without first giving— (a) the creditor; (b) the arrestee; (c) the debtor; and (d) any third party, an opportunity to be heard. (3) Where the sheriff upholds the objection, the sheriff may make an order recalling or restricting the arrestment. (4) Where the sheriff rejects the objection, the sheriff may make an order requiring a sum determined in the order to be released to the creditor— (a) in a case where the period mentioned in section 73J(3) of this Act has not expired, on the expiry of that period; or (b) in any other case, as soon as reasonably practicable after the date on which the order is made. (5) Where— (a) the sheriff is satisfied that it is more appropriate for the matters raised at the hearing to be dealt with by— (i) an action of multiplepoinding; or (ii) other proceedings, raised in relation to the funds attached; or (b) at any time before a decision is made under subsections (3) or (4) above, such an action is or other proceedings are raised, the sheriff shall make an order sisting the proceedings on the objection. (6) The sheriff may make such other order as the sheriff thinks fit. (7) Where the sheriff makes an order under this section, the sheriff shall order the person who objected to intimate that order to such of the persons mentioned in subsection (2) above as the sheriff thinks fit. (8) A person aggrieved by a decision of the sheriff under this section may, before the expiry of the period of 14 days beginning with the day on which the decision is made, appeal, on point of law only, to the sheriff principal, whose decision shall be final. (73P) Where an arrestee releases funds under section 73J(2) of this Act in good faith but— (a) the warrant in execution of which the arrestment was executed is invalid; or (b) the arrestment was incompetently or irregularly executed, the arrestee is not liable to the debtor or to any other person having an interest in the funds for damages for patrimonial loss caused by the release of funds. (73Q) (1) This section applies where— (a) a creditor— (i) obtains final decree in an action on the dependence of which the creditor executed an arrestment; or (ii) arrests in execution of a decree or document of debt; and (b) the arrestment attaches funds due to or other moveable property of the debtor. (2) The debtor may apply to the sheriff for an order— (a) providing that the arrestment ceases to have effect in relation to— (i) the funds or other property attached; or (ii) so much of those funds or that property as the sheriff specifies; and (b) requiring the arrestee to release the funds or property to the debtor. (3) An application under subsection (2) above shall be— (a) in (or as nearly as may be in) the form prescribed by Act of Sederunt; (b) made at any time during which the arrestment has effect; and (c) intimated to— (i) the creditor; (ii) the arrestee; and (iii) any other person appearing to have an interest. (73R) (1) At the hearing on an application under section 73Q(2) of this Act, the sheriff shall not make any order without first giving— (a) the creditor; (b) the arrestee; and (c) any other person appearing to the court to have an interest, an opportunity to be heard. (2) Subject to subsection (3) below, if the sheriff is satisfied that the arrestment is unduly harsh— (a) to the debtor; or (b) where the debtor is an individual, to any person such as is mentioned in subsection (4) below, the sheriff shall make an order such as is mentioned in section 73Q(2) of this Act. (3) Before making an order under subsection (2) above the sheriff shall have regard to all the circumstances including, in a case where the debtor is an individual and funds are attached— (a) the source of those funds; and (b) where the source of those funds is or includes earnings, whether an earnings arrestment, current maintenance arrestment or conjoined arrestment order is in effect in relation to those earnings. (4) The persons referred to in subsection (2)(b) above are— (a) a spouse of the debtor; (b) a person living together with the debtor as husband and wife; (c) a civil partner of the debtor; (d) a person living with the debtor in a relationship which has the characteristics of the relationship between a husband and wife except that the person and the debtor are of the same sex; (e) a child of the debtor under the age of 16 years, including— (i) a stepchild; and (ii) any child brought up or treated by the debtor or any person mentioned in paragraph (b), (c) or (d) above as a child of the debtor or, as the case may be, that person. (5) Where the sheriff refuses to make an order under subsection (2) above, the sheriff may, in a case where funds are attached, make an order requiring a sum determined in the order to be released to the creditor— (a) in a case where the period mentioned in section 73J(3) of this Act has not expired, on the expiry of that period; or (b) in any other case, as soon as reasonably practicable after the date on which the order is made. (6) Where the sheriff makes an order under this section, the sheriff shall order the debtor to intimate that order to the persons mentioned in subsection (1) above. (7) A person aggrieved by a decision of the sheriff under this section may, before the expiry of the period of 14 days beginning with the day on which the decision is made, appeal, on point of law only, to the sheriff principal, whose decision shall be final. (73S) (1) A mandate authorising an arrestee to pay over any funds or hand over other property attached by an arrestment shall be in (or as nearly as may be in) the form prescribed by the Scottish Ministers by regulations. (2) A mandate which is not in (or as nearly as may be in) the prescribed form is invalid. (3) Where— (a) a mandate is invalid by virtue of subsection (2) above; but (b) the arrestee pays over funds or hands over other property in accordance with that mandate, the arrestee is not liable to the debtor or to any other person having an interest in the funds or property for damages for patrimonial loss caused by paying over the funds or handing over the property provided the arrestee acted in good faith. (73T) For the avoidance of doubt, this Part of this Act does not apply to the arrestment of a ship, cargo or other maritime property.

Part 11 — Maills and duties, sequestration for rent and landlord's hypothec

Abolition of maills and duties

Abolition of maills and duties

207

• (1) The diligence of maills and duties is abolished and any enactment or rule of law enabling an action of maills and duties to be raised ceases to have effect.

• (2) Subsection (1) above does not affect an action of maills and duties brought before this section comes into force.

Landlord's hypothec and sequestration for rent

Abolition of sequestration for rent and restriction of landlord's hypothec

208

• (1) The diligence of sequestration for rent is abolished and any enactment or rule of law enabling an action of sequestration for rent to be raised ceases to have effect.

• (2) Notwithstanding that abolition, the landlord's hypothec—

• (a) continues, subject to subsections (3) to (9) below, as a right in security over corporeal moveable property kept in or on the subjects let; and—

• (b) ranks accordingly in any—

• (i) sequestration;

• (ii) insolvency proceedings; or

• (iii) other process in which there is ranking,

in respect of that property.

• (3) The landlord's hypothec no longer arises in relation to property which is kept—

• (a) in a dwellinghouse;

• (b) on agricultural land; or

• (c) on a croft.

• (4) It no longer arises in relation to property which is owned by a person other than the tenant.

• (5) Property which is acquired by a person from the tenant—

• (a) in good faith; or

• (b) where the property is acquired after an interdict prohibiting the tenant from disposing of or removing items secured by the hypothec has been granted in favour the landlord, in good faith and for value,

ceases to be subject to the hypothec upon acquisition by the person.

• (6) Subsection (5)(b) above does not affect the tenant's liability for breach of the interdict.

• (7) Where property is owned in common by the tenant and a third party, any right of hypothec arises only to the extent of the tenant's interest in that property.

• (8) The landlord's hypothec—

• (a) is security for rent due and unpaid only; and

• (b) subsists for so long as that rent remains unpaid.

• (9) Any enactment or rule of law relating to the landlord's hypothec ceases to have effect in so far as it is inconsistent with subsections (2) to (8) above.

• (10) Subsections (1) to (3), (8) and (9) above do not affect an action of sequestration for rent brought before this section comes into force.

• (11) Subsection (3) above does not affect a landlord's right of hypothec which arose before and subsists on the coming into force of this section.

• (12) In subsection (2) above, “insolvency proceedings” means—

• (a) winding up;

• (b) receivership;

• (c) administration; and

• (d) proceedings in relation to a company voluntary arrangement,

within the meaning of the Insolvency Act 1986 (c. 45).

• (13) In subsection (3) above—

• “agricultural land” has the same meaning as in section 1(2) of the Agricultural Holdings (Scotland) Act 1991 (c. 55);

• “croft” has the same meaning as in section 3(1) of the Crofters (Scotland) Act 1993 (c. 44); and

• “dwellinghouse” includes—a mobile home or other place used as a dwelling; andany other structure or building used in connection with the dwellinghouse.

Part 12 — Summary warrants, time to pay and charges to pay

Summary warrants, time to pay and charges to pay

209

• (1) Section 10(4) of the 2002 Act (no charge required for attachment in pursuance of summary warrant) is repealed.

• (2) In section 1 of the 1987 Act (time to pay direction)—

• (a) subsection (5)(e) (certain debts in relation to which a time to pay direction cannot be granted); and

• (b) subsection (9) (interpretation),

are repealed.

• (3) In section 5 of the 1987 Act (time to pay order)—

• (a) subsection (4)(c) and (e) (certain debts in relation to which a time to pay order cannot be granted); and

• (b) subsection (9) (interpretation),

are repealed.

• (4) In section 15(3) of the 1987 Act (interpretation)—

• (a) in the definition of “decree or document of debt”, after paragraph (a) insert—

(aa) a summary warrant;

; and

• (b) the words “or a summary warrant” are repealed.

• (5) In section 90 of the 1987 Act (provisions relating to charges)—

• (a) in subsection (1), the words “Subject to subsection (2) below,” and “an attachment or” are repealed;

• (b) after subsection (1) insert—

(1A) The following subsections of this section apply to any case where it is competent to execute diligence only if a charge for payment has been served on the debtor.

• (c) subsection (2) (no charge required for attachment or earnings arrestment in pursuance of summary warrant) is repealed;

• (d) in subsection (5), for “an attachment or an earnings arrestment” substitute “ diligence ”; and

• (e) in subsection (6), for “an attachment or an earnings arrestment” substitute “ diligence ”.

Time to pay directions and time to pay orders

210

• (1) The 1987 Act is further amended as follows.

• (2) In section 1 (time to pay directions)—

• (a) in subsection (1)—

• (i) after “Act,” insert “ on an application by the debtor, ”; and

• (ii) for the words “may, on an application by the debtor,” substitute “ , 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, ”; and

• (b) after subsection (1) insert—

(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.

• (3) In section 5 (time to pay orders)—

• (a) in subsection (2), for the words “may, on an application by the debtor,” substitute “ , 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, ”; and

• (b) after subsection (2), insert—

(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.

Part 13 — Amendments of the Debt Arrangement and Attachment (Scotland) Act 2002

Debt payment programmes with debt relief

211

• (1) The 2002 Act is amended as follows.

• (2) In section 2 (debt payment programmes)—

• (a) after subsection (1) insert—

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

; and

• (b) in subsection (4), after “section 7(1)” insert “ or 7A(1) ”.

• (3) After section 7 insert—

(7A) (1) The Scottish Ministers may, by regulations, make such further provision as they think fit in connection with debt payment programmes for the purposes of— (a) enabling such programmes to provide for the payment of part only of money owed by debtors; and (b) on the completion of such programmes or otherwise, enabling any liability of debtors to pay any part of such money owed as is outstanding to be discharged. (2) The regulations may, in particular, make provision about— (a) the minimum proportion or percentage of debts which shall be paid under such debt payment programmes; (b) without prejudice to section 7(2)(h) to (j) above, the consent of creditors for the purposes of section 2(4) above (including the circumstances in which consent by a majority by number or in value shall be sufficient); (c) the effect of such programmes on debtors' liabilities for interest, fees, penalties and other charges in relation to debts being paid under such programmes; (d) the effect of such programmes on the rights of creditors to charge interest, fees, penalties or other charges in relation to debts being paid under such programmes; (e) circumstances in which, on completion of such programmes or otherwise, any liability of debtors to pay— (i) part of any debts as are outstanding; or (ii) any interest, fees, penalties or other charges in relation to such debts, is to be discharged. (3) Subsections (3) and (4) of section 7 above apply for the purposes of regulations under this section as they apply for the purposes of regulations under subsection (1) of that section.

• (4) In section 62 (regulations and orders)—

• (a) in subsection (3), for “of this Act”, where those words second occur, substitute “ above or regulations made under section 7A above ”; and

• (b) in subsection (4), after “section 7 above” insert “ , any regulations made under section 7A above ”.

Further amendments of the Debt Arrangement and Attachment (Scotland) Act 2002

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• (1) The 2002 Act is further amended as follows.

• (2) In section 2(3) (form and content of applications for debt payment programmes), the words “shall be signed by the debtor and” are repealed.

• (3) In section 3 (application by debtor for approval of debt payment programme), after subsection (2) insert—

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

• (4) In section 5(4) (form and content of applications for variation of debt payment programmes), paragraph (b) and the word “and” immediately preceding it are repealed.

• (5) In section 7(2) (examples of provision that may be made by regulations under section 7(1))—

• (a) after paragraph (b) insert—