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Guidance Notes
Debt Problems: The key questions

Many questions arise when debt problems are encountered.  We note below some of the key questions people ask.  This section of the website has been drawn from the Scottish Executive booklet "Dealing with Debt"




Having problems meeting your debts?

Many people have problems meeting their debts.  You should not worry alone and you do not have to deal with the situation on your own.

If you are worried because you owe money and can't keep up your payments - what should you do?

It may be the case that you have only one or a few debts that you have trouble repaying. Alternatively, you may owe money to many different people or companies. Your debts might include credit cards, catalogues, rent/mortgage arrears, council tax arrears, bank loans, unofficial loans and utilities.

It is important that you think about every creditor you owe money to rather than try to deal with them individually. If you deal with one and pay all you can, you are likely to find another creditor starts to press for payment: hence the advice to think about the whole position.


Reasons for getting into debt

Debts can occur because of an unexpected change in circumstances, or an unplanned increase in your outgoings because of:

  • illness
  • onset of a disability
  • unemployment
  • bereavement
  • a new baby in the family
  • you may have borrowed too much.

It is important to understand the reasons why you are in debt even if the reasons are embarrassing and caused by excessive personal expenditure. It is also important to understand how to get help from someone who you can talk to openly. Such person will not judge you, or criticise you, but offer practical options for you to consider.


It is important to take action as soon as possible

It is always better to deal with debt problems at an early stage. The longer you wait the worse things are likely to become.

If you go to an adviser for help they will review your total debt position. The advisor will help you decide whether you are able to make any payments to your creditors and, if so, which creditor(s) should be paid first and why. An advisor can help by negotiating with your creditors and deal with emergencies such as:

  • gas or electricity being disconnected             
  • your wages being arrested.

 It will be important to look at how your income can be maximised and, for example, it may appropriate to apply for state benefits:

  • income support
  • tax credits
  • council tax or housing benefits or rebates.

A money adviser will not make your decisions for you, but will help you by giving advice and information, so that you make informed choices.


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Had a default notice from a creditor?

A default notice is usually the first step which a creditor takes before taking you to court. In other words, a creditor must advise you in writing that you haven't paid your debt. You must be given the opportunity to make payments to bring your account up to date. Some debts are treated differently e.g. council tax.

A default notice may be the first formal document that you will receive about the debt. The document will say quite clearly that it is a default notice under the Consumer Credit Act 1974, and that you have time to make a payment in order to bring the account up to date. If you do so, the creditor cannot take further action. However, if you are unable to make the payment, further action can be taken against you. If that is the case, it may be sensible to organise a meeting with a money adviser as soon as possible.

If the level of the debt, is under £25,000 you may be able to apply to your local court for a time to pay order to give you longer to pay your debt. A money adviser will be able to help you make an application, and will include your income and outgoings as part of the application which, in turn, will enable the sheriff to make an assessment of your ability to repay the debt.

If you do nothing, the creditor is likely to raise a court action against you, and, depending on the amount of your debt, you will have to repay the debt you owe with added interest. Also, you will probably be liable for the creditor's expenses.

Unless you tell your creditors that you are having difficulties, they won't know. Whilst debt problems are a source of worry and embarrassment for many, keeping it a secret will not help.


Did you know?

  • you will not go to prison for non-payment of debts, such as credit cards, bank loans, and council tax. You can only be sent to prison for non-payment in very limited cases, e.g. if you deliberately refuse to pay money for the support of an individual or children under a court order, or if you have taken money by fraud.                 
  • creditors will send you a default notice to give you the opportunity to be aware of the debt and allow you time to consider how to deal with the matter e.g. to pay the debt.


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Being taken to court?


If you have not paid a debt, your creditor can take you to court. This can happen if you haven't paid the whole amount that you owe, or you haven't make the payments that are due.


How do I know if I am being taken to court?

You will know that court action is being taken if you receive a summons or an initial writ.

  • if you owe £750 or less you will receive a small claims summons.   
  • if you owe more than £750 and up to £1,500 you will receive a summary cause summons.                     
  • if you owe more than £1,500 then you will receive an initial writ.

The summons or initial writ should tell you who is taking you to court, how much they think you owe them and how they have worked out the amount of the debt. It should also tell you what court the action is being taken in and what they want the sheriff to do.


What can the sheriff be asked to do?

In most cases the creditor taking you to court will ask the sheriff to order you to pay the amount you owe. If the money that you owe is rent or mortgage payments that you haven't paid on time, the sheriff might be asked to order you to leave your home. If the money that you owe is for a car or something else that you have bought on credit or hire purchase, they might also ask the sheriff to order you to hand back the goods.


What should I do if I am being taken to court?

It is important that you seek help and advice. Contacts are listed in section 6 below.

The papers that you will get with the summons or initial writ will ask you to reply to the court. There will be a date by which you have to do that. Do not ignore this date.

Normally, you will be able to do one of three things:

  • you can defend the claim if you don't agree that the money is due to the creditor taking you to court. This may be because you don't owe them anything, or because you think they have made a mistake in working out the amount that you owe. If you do this there will be a hearing to allow the sheriff to find out more about the claim. If there is a hearing you or a solicitor will have to appear in court. If you do not qualify for legal aid, court representation will cost you money.
  • you can admit the claim if you agree the debt due to the creditor. If you admit the claim the sheriff is likely to grant an order requiring you to pay the whole amount which is owed, usually with interest, or to give back something which you have bought on credit or hire purchase, or leave your home. The order will require you to pay the creditor's expenses.
  • you can admit the claim but ask for time to pay. You should get a form with the summons or initial writ that you must complete if you want time to pay. You must say how much you are able to pay and whether you want to make payments weekly, fortnightly, monthly or some other way. The creditor can choose to accept or reject your offer. If it is accepted, the sheriff will order you to make the payments you have offered. If it is rejected there will be a hearing and you can attend this to explain to the sheriff why you need time to pay. Again you will usually have to pay interest and the creditor's expenses. It is up to you to find out from the court if your offer has been accepted or rejected.


Did you know?

  • you can't be taken to court unless a summons or an initial writ has been sent to you in the post or delivered to you personally.
  • an action for payment of money is not a criminal charge and doesn't give you a criminal record unless it relates to non-payment of fines imposed by a court.       
  • if you want to defend the claim you don't need to have a solicitor and you can appear at the court hearing yourself.

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Local government debts e.g. council tax and water charges


Council tax is a tax collected by local authorities to enable them to provide services for the community. Charges for water and sewerage are also collected by local authorities in a similar way.

Remember, if you fall into arrears for a previous year's council tax, and water rates, you will have to pay back arrears as well as the new year's council tax.

You will have been sent an annual bill explaining what you are due to pay the council. Some councils have schemes that enable you to make your payments by installments, by direct debit, or by making payments at a paypoint terminal. If you do not make the payments on time the council will write to you and give you the opportunity to bring overdue payments up to date.

If you miss a payment you will be sent a notice, giving you seven days to bring the account up to date. If you don't pay on time you lose any right to pay by installments, and the whole sum becomes due. You will be given a further seven days to make the full payment. If it isn't paid, the council can apply to the sheriff for a summary warrant and this includes a surcharge of 10% on top of the amount of the arrears. You are not entitled to ask the sheriff to grant you time to pay your debt.

If you are in debt to your local council they may pass the collection of your debt to a recovery agent, or a sheriff officer, depending upon whether a summary warrant has been granted.

A summary warrant is different from a warrant granted after a normal debt action and allows the council to enforce the debt. The granting of a summary warrant is a serious matter. The council can collect their debt through a wage arrestment, bank arrestment or sale of your goods. Unlike other forms of debt collection from creditors you cannot apply to the court for time to pay your debt.

However, you can try to negotiate a settlement with the council or an agent acting on their behalf. If the council has been granted a summary warrant for your debt you should take immediate action by:

  • making an arrangement with the council for payment, or             
  • contacting a money adviser for advice.


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What might happen to you if you don't pay your debts?


If you can't pay your debts your creditor can take you to court to try and recover the money that you owe them. What they can do will depend on how much money you owe, what kind of debt it is and your own personal circumstances.

Remember that you can get help and advice if action is taken against you by a creditor. Some advice agencies can help represent you in court and you should check to see if your local advice centre offers this service.

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Wage arrestment or bank account arrestment

Earnings arrestment

If you are working, the money you owe can be taken from your wage or your salary by an earnings arrestment but before this can happen your creditor will have taken you to court and been awarded a court decree.

In most cases you will have been sent a charge for payment. This is a warning that unless you pay what you owe within 14 days they are going to take further action to recover the debt. After 14 days a creditor can instigate an earnings arrestment. If the earnings arrestment proceeds, your employer may charge you a small amount for dealing with the earnings arrestment.

How does an earnings arrestment work?

Your creditor will send the earnings arrestment to your employer. Your employer must make deductions from your wage or salary. You cannot ask or expect your employer not to do so. The deductions are made every pay day in the same way that tax is taken off your wage or salary. Your employer sends the money to the creditor who served the earnings arrestment.

Do I get a copy of the earnings arrestment?

Usually you will get a copy of the earnings arrestment. If not, your employer can provide a copy.

How much money can be taken out of my wage or salary?

There is a limit on how much money can be taken from your wage or salary. That limit depends on how much you earn and whether you are paid weekly, monthly or in some other way. The limit is fixed by law and your employer should have a note of how much may be deducted. Click here for tables showing the maximum that can be deducted from your earnings

Bank account arrestment

If you have money in a bank, building society account or with a credit union, the money you owe can be taken from your bank, building society or credit union account.

How does a bank arrestment work?

Your creditor sends the arrestment to your bank, building society or credit union. When the arrestment is served, the money, which you have in your account, is frozen and you cannot withdraw that money or use it to make other payments such as standing order or direct debit payments. All the money in your account is frozen, even if that is more than the total amount which you owe.

When is the money taken out of my account?

Your creditor doesn't get the money that has been frozen right away until they go to court and request authority to make your bank, building society or credit union release the money. The court will order your bank, building society or credit union to pay the amount that you owe. The court may also order you to pay the costs of the court action.

If you want to avoid paying the costs of this court action you can give written permission to your bank, building society or credit union to release the amount that you owe.


Did you know?

  • your creditor can use an earnings arrestment and a bank arrestment at the same time. This could cause you severe difficulty and you can apply to the court for time to pay your debt.
  • a money adviser can help to explain how wages and bank arrestments work can help to make sure that only the amount which should be deducted is taken by your creditor.

Child support

If you do not pay child support payments which you have been ordered by a court to pay or which the child support agency has asked you to pay, deductions can be made from your wage or salary to meet these payments.


Did you know?

  • A creditor can use more than one method to try to get their money back.         
  • A creditor can't usually take action against you unless they have first taken you to court.                       
  • Your employer can charge you a fee of 50p every time a deduction has to be made under an earnings arrestment.

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Rent and mortgage arrears


If you have fallen behind with your rent or mortgage payments or repayments of any loan secured on your home, you should take action as soon as possible.

Falling behind with these payments can lead to repossession of your home or eviction by your landlord.

The action that you take if you have fallen behind will depend on a number of factors including whether you have a mortgage or pay rent and what type of mortgage or lease you have. It will also depend on whether you have other debts that you need to repay.

There are laws protecting homeowners and tenants who fall behind with mortgage and rent payments. You should get expert advice if you think action is being taken against you to repossess your home or evict you.

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Attachment order

If your creditor has not been able to get back the money you owe them, then they may be able to 'attach' your property i.e. tangible assets such as a car, antique or jewellery. These attached assets can be sold to pay your debt. Generally, an attachment order will not apply to your home.

What is attachment?

Attachment firrst became available on 1 January 2003. Attachment can be used to try and obtain payment from you by attaching articles of value owned by you but held outside the living area of your home,

  • for instance, in your garage, driveway or in buildings used for business.

When can attachment be used to recover money you owe?


Before your creditor can proceed with attachment he will have taken you to court in order to establish that you are liable to pay the debt. The creditor will, in most cases, serve you with a charge for payment that tells you that unless you pay what you owe within 14 days they are going to take action to recover the debt. Your creditor will also send you a copy of the booklet "Dealing with Debt".

If you have not paid in 14 days, a sheriff officer can enter any premises, other than your home, where your goods are kept in order to value them. The sheriff officer must send a report of the valuation to the court. Thereafter, your creditor may arrange for your goods to be auctioned to help repay your debt.

There are detailed rules about the kinds of goods that can be attached, when attachments can be carried out and how to stop goods being auctioned after they have been attached. Your money advisor will be able to provide advice specific to your circumstances.

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Exceptional attachment order

An Exceptional Attachment Order "EAO" is a court order that allows the attachment of goods inside the home. The sheriff will only grant an EAO if satisfied that the creditor has taken all reasonable steps to consider other options for recovering the debt.

When can an EAO be used?

Before this can happen the person who you owe money to will have taken you to court. You will be served with a charge for payment in most cases. After you receive the charge, and unless you pay what you owe within 14 days, your creditor can take action to recover the money that you owe.

After 14 days they can then apply to court for an EAO and have to:

  • prove the sheriff that they have sent you the booklet "Dealing with Debt" issued by the Scottish Executive.                   
  • prove to the sheriff that they tried to come to an agreement with you about how you can pay your debt.                     
  • show that they have a court decree or its equivalent that already proves the amount you owe them.

How does an EAO work?

If the sheriff grants an EAO, your creditor can make arrangements to auction items of your property to help pay off your debt. A sheriff officer will come to your home to value and immediately remove the items which are to be auctioned.


What can be taken from your home?

An EAO only affects non-essential household goods. By law, many items cannot be removed from your home under an EAO. These include items like bedding, chairs, sofas, tables, laundry and kitchen equipment, telephone, televisions, computers and radios. A full list can be seen here.


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Where can I go for help?

Help is available.

• first, don't panic.                   

• you can get in touch with one of the many free money advice services. You can telephone an advice agency for an appointment, call the National Debtline or Consumer Credit Counseling Service to speak to a trained money adviser. A money advisor will talk you through your problems and work with you to try to improve your situation. Money Advice Scotland can put you in touch with a local agency and you can also get details of your local Citizens Advice Bureau through Citizens Advice Scotland.  Click here for a list of Citizen Advice Bureau offices

• you can also consult a licensed insolvency practitioner such as Meston Reid & Co (01224.62555) or e-mail You may be charged a fee, although the first consultation is always free.     

• most importantly, don't ignore the situation. It is likely to get worse not better.

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