One of the biggest issues in Scotland is debt collection. Like the US, there are Sheriff’s in Scotland too, in fact, the word Sheriff started out in the British Isles before the Norman invasion and survived to become a well-used word describing officers representing the law. In Scotland, the word stands for “Judge.”
“Sheriffs deal with the majority of civil and criminal court cases in Scotland, with the power to preside in solemn proceedings with a jury of 15 for indictable offenses and sitting alone in summary proceedings for summary offenses. The maximum sentencing power of a sheriff in summary proceedings is 12 months imprisonment or a fine of up to £10,000. In solemn proceedings, the maximum sentence is 5 years imprisonment or an unlimited fine.”
Scottish debt collectors receive authorization from the Sheriff (Judge) to seize property, and as such, debtors need to know their rights. One such company, Scotland’s leading debt collection agency is Scott & Co. This company has 13 centers in Scotland; they provide debt collection for consumer and commercial debts.
Know how to stop Scott & Co debt collectors action?
The Scottish Debt Collection Process
If a person has a debt, and you default on the payment, based on the contract you signed, the lender or service provider will send you a reminder that you must pay the overdue amount within seven days. If there are more that one person in the household that can be found responsible for paying the debt, they will receive a reminder as well, the debt can be paid in installments. If the debt is not paid by the seventh day, a second reminder will be issued, and the installment option is revoked. The debtor will have fourteen days to pay the debt.
Council Tax Debts
If a person does not pay their council taxes after receiving two notifications, the local authorities will apply to their debt collector agency (Scott & Co.) through their legal office, providing the debt collectors with the debtor’s name and address and the amount owed. Scott & Co. will then contact the debtor with a warrant for payment and how to pay it. In this instance, it is advisable that the debtor contacts Scott & Co. as soon as possible to discuss terms of repayment. Remember, at this stage, there are additional costs added to the debt that includes fines, interest and service fees that Scott & Co. take for their service to the council. The debtor will be given 14 days to come to an agreement with Scott & Co. Depending on the debtor’s status, in some instances where the debtor is invalid or has special needs, the council will consider the correct actions to take before incurring diligence, which is power to enforce action. Scott & Co will then use diligence which provides them with Sheriff’s powers to force payment. These powers enable Scott & Co. access to a debtor’s bank account and company wages. If they cannot get the payment from these sources, they will then come to the debtor’s home or business and remove property. In most cases, a lien will be placed on the property that will stop any debtors from selling their property before paying their debts.
There are a number of actions (diligence) a Sheriff can use to collect debts, these are:
- Earnings arrestment, where a debtor’s wages or income from sales/services are seized
Bank arrestment, where a bank account is seized
- Attachment of property outside a home, where the property that is not in the home can be seized and sold.
- Application to the Sheriff Court for an exceptional attachment order (ERO), Home Invasion to seize property
- Inhibition on the sale of your home, property, or business premises, to assure payment from the sale of the property
Before any of the above diligence is utilized, the debtor has time to pay their debts and can spread the debt in monthly installments. If this is not reached, then the above cases come into play.
A debtor’s wages are seized, and a percentage of the income after tax is taken to pay off the debt in installments. The income is balanced so that the debtor has enough to pay off basic expenses and not incur more debt. The payment is based on the debt, the interest, the fines and Scott & Co.’s fees.
Since this step is drastic, the law stipulates that Scott & Co. send a debt advice package of information 12 weeks before they serve the debtor with the earnings arrestment. Any debtor that receives such an arrestment order can still belay it by coming to an agreement and paying the debt through a pay order. Scott & Co. can grant this provision at their discussion.
Another form of arrestment that Scott & Co. can instigate is freezing bank accounts. In instances when a debtor has one or more accounts, all accounts will be frozen simultaneously, and any monies in the accounts will be taken to pay the debt. If there is not enough money, or if the debtor comes to an agreement with Scott & Co., they can pay an initial lump sum amount that will unfreeze the account and then come to an agreement for paying the rest of the debt. A frozen account means that all credit cards associated with the account will be blocked. Any investments and foreign currencies held in the account are liable for payment. The freeze will be enforced for 14 days, in which a debtor has time to pay the debt or come to an agreement, after this time is up, Scott & Co. will seize any monies available to pay for the debt. If an agreement is met, the accounts will be unfrozen.
Since the arrestment arrives unannounced, debtors will only find out that their accounts were frozen when they try to access them, or in some instances will receive notification from the bank that the account has been frozen and what amount is in debt.
Attachment of property outside the home
Another tool that Scott & Co. can use for collecting council tax debt is the seizure and sale of property that is not found in the home or property of the debtor. This means garages, outhouses, storage places and vehicles. (Basically, anything and everything that is not found in the home or business place of the debtor)
Usually, Scott & Co. must give you a debt advice package 12 weeks before any action, but in some cases, this can be delivered on the same day of the seizure. Since Scott & Co. cannot enter the debtors home even by force, they will revert to entering any outside building that is owned and seizes property. They will then give the debtor a list of the properties seized and the expected sales value (which is always a very low percentage of their real worth) to be sold. In regard to property that is associated with any business or income generating needs. The seizure of property not in the home is limited to £1,000 for basic business property and up to £3,000 in vehicle value in the case where they are needed to perform a business, which the council deems important for a debtor to continue in order to pay any future debts. All other properties, including cars that are not related to business needs, will be sold and the monies gained will be used to pay back the debt. If there is surplus income from the sale, it will be returned to the debtor. Debtors have 14 days advance warning before a sale and can buy back any properties seized. This income will be used to pay back the debt. Debtors can challenge Scott & Co. in court if they think certain items were seized illegally.
Exceptional Attachment Order (EAO)
This stands for Home Invasion. It means that Scott & Co. may forcibly enter a home and catalog and take any items in the house that will be sold, the income from the sales will be used to pay back the debt. The EAO is granted by the court only and is operable without prior notice between 8am to 8pm every day except Sundays. Since Scott & Co. have the legal authority to enter the property, any homeowner that tries to repel a home invasion forcibly can and will be charged with a breach of the peace. What a homeowner can do is a demand to see the name of the Sheriff and the court order. In order for an EAO to take place, there must be at least one 16-year-old or above individual in the home. Ay damages made by a forced entry will be paid for by the council or court, but usually, the cost is added to the fine that Scott & Co take which means the debtor ends up paying for any damages themselves. If the individual at home is invalid or does not speak English, then the EAO cannot take place. Items that cannot be taken include clothing, bedding, basic household furniture, refrigerators, and cooking equipment.
Methods for Paying Debts
Scottish Deed Trust
This legislation comes into play with debts that are too large to pay back, even over time. Any debtor that deems they are incapable of paying their debts can apply for a Scottish Deed Trust that will give them the chance to pay back a small amount in increments and have up to 90% of the debt removed. As long as the debtor pays the monthly installments and does not accrue any other debts during the time of the trust, they are safe from further action. During the trust period, the debtor is also free from a debt collector and bailiff actions. The Scottish Deed Trust lasts for 48 months.
Debt Arrangement Schemes
It is advised that all debtors reach an agreement to pay their debts before Scott & Co. are given diligence. This means to contact the council and to come to an agreement or to contact the individual or business that money is owed to. Once Scott & Co. are brought into action, the debt jumps up a lot; it accrues higher interest rates, fines and also the fees that Scott * Co. demand for their services to the council or courts. After Scott &Co. have been brought into action, the debtor may still reach an agreement, but it will include the extra costs.
- Scott & Co. Fees are 10% of the debt.
- Complaints about Scott & Co can be made with the Sheriff Principle at the local Sheriff Court.
Commercial debts include credit cards, bank loans, private loans, contracts that have financial clauses and any debt that is given a financial value in court.
- Taxes include local and State.