Step by Step Guide - Debt Recovery / Litigation Scotland
Click on a heading below to go to the appropriate pageLegal Entities
Knowing who you contracted with and seeking funds from is essential. Mistaking the type of legal entity could render your Judgement invalid or see an action raised against you.
Moratorium
Should an individual be considering bankruptcy/sequestration or a trust deed they may apply for a moratorium, during which period a creditor may not pursue recovery of the debt.
Letter of Demand
A letter of demand gives warning you are about to issue proceedings against debtor. A letter of demand encourages a debtor to pay within the prescribed period. Failing to issue a letter of demand may well impact on recovery of expenses.
Shortened Demand
Where the debtor is not an individual, a shortened demand can be issued to establish apparent insolvency (inabilty to pay sums as they fall due) for commencing insolvency proceedings.
Statutory Demand
Before a creditor can apply to petition for bankruptcy (England), sequestration (Scotland) or the appointment of a liquidator they must serve a statutory demand on the debtor in a prescribed form.
Litigation
A civil payment action for debt recovery may be raised in the sheriff court, or if the sums sued for permits, the Court of Session.
Diligence on the Dependence
A warrant to do diligence on the dependence of an action may be granted by the court on application prior to the action being served. This could allow for an Arrestment and/or an Inhibition on the Dependence of the action.
Diligence / Enforcement
Once a decree is granted, various methods of diligence are available to enforce the decree and recover the debt due.
Liquidation
A winding-up petition will be lodged with either the sheriff court or the Court of Session, dependent on the paid up share capital, seeking the appointment of a liquidator.
Sequestration / Bankruptcy
To petition for an individual debtor to be sequestrated (declared bankrupt), various requirements must be fulfilled, subject to the debtor not being subject to a Debt Arrangement Scheme (DAS), a Trust Deed or a Moratorium.
Trust Deed / Debt Arrangement Scheme
Forms of insolvency that avoids bankruptcy.
Administration
Administration may be used to rescue a company and achieve a more desirable outcome for creditors. It allows a company to trade for a period, protected from it's creditors.
Receivership
Usually appointed by a lender on default, with required security.
The content of this website is for general information only and should not be relied upon. It is not intended to be construed as legal advice and should not be treated as a substitute for specific advice.