Appendix 1: Glossary
Accountant in Bankruptcy
An executive agency of the Scottish government responsible for administering personal bankruptcies and recording corporate insolvencies in Scotland.
Acquirenda
Any property or right acquired or received by a client within four years after the date of sequestration or protected trust deed.
Additional respondent
Used in simple procedure actions, a person who is not named as a respondent in the claim form but who enters the case later.
Alternative dispute resolution
Ways clients can solve problems without having to go to court, like using mediation, arbitration and conciliation.
Apparent insolvency
When a person cannot pay their debts as they fall due. This can be evidenced by a failure to pay a charge for payment or statutory demand.
Arbitration
A way of resolving a dispute without going to court. A third party (the arbitrator) looks at both sides and decides on a resolution.
Arrestment
The legal process through which a creditor can take possession of goods that are owned by a client but are in the possession of a third party.
Arrestment on the dependence
An order freezing client’s funds or goods held by a third party (typically money held in a bank account) in advance of the sheriff making a decision in a civil court case.
Assets
Goods belonging to a client which can be sold for the benefit of their creditors.
Attachment
Can be used to enforce payment of a debt by means of valuing, removing and selling the client’s corporeal moveable property.
Award of sequestration
The order issued by a sheriff declaring a person to be bankrupt and sequestrating their estate. The award vests the client’s estate in the trustee.
Bankruptcy
A formal insolvency process where a trustee is appointed to realise and distribute the bankrupt’s estate for the benefit of creditors. Also known as sequestration in Scotland.
Bankruptcy Restriction Order
Restrictions placed on a debtor where there has been misconduct before or after the date of sequestration. The restrictions are imposed by a sheriff or the Accountant in Bankruptcy and remain in force after the date of discharge for periods varying between two and 15 years. They are published in the Register of Insolvencies.
Business Debt Arrangement Scheme
A statutory debt management tool to help partnerships, trusts or an unincorporated body of persons to pay off their creditors over an extended period. It also provides protection from creditors taking action against them to recover their debts.
Certificate for Sequestration
A formal document confirming that a client cannot pay their debts and is apparently insolvent.
Charge for payment
A formal demand for a debtor to pay the money they owe to their creditor. The amount includes the original debt plus any interest or charges. The client has 14 days to pay the charge for payment.
Charge for removing
A formal document served by a sheriff officer advising a client about eviction from their home. Generally, the clients then has 14 days to leave the property.
Common Financial Statement
Used by advisers in Scotland to create a uniform approach to preparing financial statements.
Common Financial Tool
Used by the Accountant in Bankruptcy to assess household income and expenditure to set a contribution across all statutory debt solutions.
Condescendence
A written statement setting out the factual and legal grounds of action of the pursuer in a civil action.
Continuation (of an action)
An order made by a sheriff to continue the case to another date – ie, a temporary postponement.
Corporeal movable property
Anything that can move or be moved – includes money, furniture, clothing , farm livestock, crops etc.
Court of Session
Scotland’s highest civil court.
Courtroom supporter
A person who accompanies a party in court to provide moral support. They are sometimes referred to as a ’lay supporter’ or ‘McKenzie friend’.
Credit reference agencies
Agencies providing lenders with information (a ‘credit reference file’ or ‘credit report’) about potential borrowers, which lenders use to make their decisions.
Credit union
A financial co-operative, owned and controlled by its members, which provides savings, loans and aservices to its members. The Financial Conduct Authority oversees and regulates credit unions.
Creditor
Any person, business or organisation which is owed money by another.
Creditor petition
An application by a creditor, through the court, for the sequestration of a client’s estate.
DAS Administrator
The Accountant in Bankruptcy overseeing the Debt Arrangement Scheme. Its responsibilities include maintaining the DAS Register and approving debt advisers, payments distributors and Debt Payment Programmes.
DAS Register
An online public register which holds information about those applying for DAS and those who already have a Debt Payment Programme under a Debt Arrangement Scheme (DAS).
Debt Advice and Information Package
A booklet which provides information to clients to help them deal with their creditors. A creditor is required by law to provide this before using most types of diligence.
Debt Arrangement Scheme
A statutory debt payment plan to help those who want to pay what they owe over an extended period, free from the threat of enforcement action by creditors through diligence or bankruptcy. It freezes interest, fees and charges on the debts included.
Debt Payment Programme
A proposal under the Debt Arrangement Scheme allowing a client to pay their debt over an extended period. It can be for any amount of money or for any reasonable length of time. Monies are ingathered and distributed by an appointed payments distributor.
Debt packager
Commercial business providing debt advice and generating income by referring customers to debt solution providers and receiving a fee. They must be approved by the Financial Conduct Authority.
Debtor application
When a person applies for their own bankruptcy.
Debtor contribution order
The fixed amount a client pays in contributions towards their bankruptcy usually over a 48-month period. This is set by the Accountant in Business using the Common Financial Tool.
Debtor discharge
The date that the client is formally discharged from their bankruptcy or protected trust deed.
Decree
A money judgment issued by the sheriff court. It is an order to pay the amount claimed by a creditor. The total may include interest and court expenses.
Decree by default
A final order granted to a party against another party who has failed to appear, to lodge a document or do something required by the court or rules of court.
Decree in absence
A final order granted to the pursuer in a civil action where the defender has not lodged a notice of intention to defend or has not lodged defences and does not appear or have someone appear on their behalf in Court.
Decree absolvitor
A court judgment in favour of the defender. This usually means that the same action cannot then be re-raised.
Deductions of earnings order
Used by the Child Maintenance Service to take child maintenance payments from a paying parent’s earnings or pension. This is not classed as diligence
Default notice
A formal letter (notice) sent by a creditor when a client is in arrears on a consumer credit contract. The notice should give the client 14 days to pay the arrears. A creditor must serve a default notice before they can take any further legal action.
Defender
A person against whom a civil action is raised.
Diligence
The technical term for enforcement in Scottish law. It is the steps a creditor can take to get their money back after they have taken court action against a client or entity.
Diligence against earnings
A collective term for the ways creditors can deduct money directly from a client’s salary to enforce the payment of a debt. The three methods are: earnings arrestment, current maintenance arrestment and conjoined arrestment orders.
Direct earnings attachment
Where an employer is asked to deduct benefit overpayments from an employee’s pay. This is not diligence.
Dividend
The distribution of funds to creditors in a bankruptcy. This could repay the debt in full or in part.
Exceptional attachment order
A form of diligence in which a creditor attaches moveable property belonging to a client which is inside the client’s home (eg, jewellery), which is then removed and sold at auction.
Executor dative
A person appointed by the court to gather and distribute the estate or property of a deceased person.
Extract/extract decree
A written instrument signed by a clerk of court containing a statement of a decree or order of the court and, if necessary, a warrant to charge the named person and to execute all competent diligence against person or property.
Financial Conduct Authority
A government body which regulates the financial services industry in the UK. Its role includes protecting consumers, keeping the industry stable and promoting healthy competition between financial service providers.
Fiscal fines
Can be offered as an alternative to prosecution in cases which would otherwise have proceeded in the lowest-level criminal court. If the accused accepts a fiscal fine, they cannot be prosecuted for the alleged offence.
Full Administration Bankruptcy
A form of bankruptcy where a client has debts of more than £3,000 and does not meet the criteria for Minimum Asset Process bankruptcy.
Gratuitous alienation
The voluntary disposal of a client’s asset by the client to another person for no value or less than full value.
Heritable estate
Property in the form of land and houses, as distinct from moveable property such as jewellery or an animal.
Inhibition
A personal diligence against a client, preventing them from selling, transferring or otherwise disposing of their property. It also prohibits the client from securing new loans against the property.
Initial writ
The document by which ordinary civil proceedings in the sheriff court are usually initiated.
Insolvency
A state in which a person or business cannot pay their debts.
Insolvency practitioner
Someone who is licensed and authorised to act in relation to an insolvent individual, partnership or company. Most insolvency practitioners are accountants or insolvency specialists working in firms of accountants. They must hold a licence and have passed the insolvency examinations.
Interim attachment
A process (similar to diligence on the dependence) which restricts the clients’s ability to deal with a limited range of moveable assets in their possession while a court action progresses.
Interim order
A temporary court order made until a final order is made.
Judgment
The decision of a court setting out its reasons for the decision.
Justice of the peace
Lay magistrates who sit with a legally qualified adviser to deal with summary criminal cases.
Lay representative
Someone authorised by a client to help prepare and conduct a civil legal action. They can do anything involved with the preparation or conduct of a case that a party can do. A lay representative is not a legal representative.
Legal representative
An advocate, a solicitor, a trainee solicitor or a person otherwise entitled to conduct proceedings in the sheriff court.
Limitation period
A procedural bar from bringing certain types of action after the expiry of a time limit. In certain cases, the court can allow an action to proceed even after the limitation period has expired.
Lodge
To deposit documents and other evidence to the Sheriff clerk before a hearing, for their use at that hearing.
Messengers-at-arms
Officers who execute civil and criminal processes of the Court of Session and High Court of Justiciary.
Minimal Asset Process
A simplified sequestration process for people with few assets and who meet the relevant criteria at the date of making the application for bankruptcy. Anyone awarded a bankruptcy through this route will (as long as they cooperate with their trustee) receive a discharge automatically after six months.
Money attachment
A diligence used to collect cash from commercial clients such as bars, clubs, shops or restaurants. It cannot be used to collect money in a dwellinghouse.
Moveable estate
Personal estate encompassing all assets, but excluding land and buildings.
Offer of composition
An offer made to creditors seeking agreement to accept payment or part payment of debts owed by the client. Where creditors agree, the debt is discharged.
Ordinary cause
Used in sheriff court procedure when the debts being recovered are for £5,000 or more. It is a complex and expensive process to raise and to defend
Party litigant
A person who represents themself in civil court proceedings without representation from a solicitor.
Pause
To temporarily suspend the progress of a simple procedure action case.
Personal insolvency
The awards of bankruptcy in Full Administration Bankruptcy and Minimal Asset Process or entering a protected trust deed.
Petition for sequestration
The formal application to court by a creditor, creditors or a trustee under a trust deed for the bankruptcy of a client’s estate.
Prescription (negative)
A substantive rule of Scots law which extinguishes certain rights and obligations after the applicable time. This means that after that period, the right or obligation ceases to exist, and is not simply unenforceable. In Scotland, the obligation to pay a debt prescribes five years after the debt becomes enforceable unless, within that time, the creditor has made a relevant claim or the client has relevantly acknowledged the claim. Prescription following a decree is extended to 20 years.
Procurators fiscal
Legally qualified civil servants who receive reports about crimes from the police and others and decide what action to take in the public interest, including whether to prosecute.
Protected minimum balance
The minimum amount protected from arrestment (currently, £1,000).
Protected trust deed
A voluntary formal debt solution entered into by a client. It transfers their estate to a trustee to be realised for the benefit of their creditors. A trust deed may be protected if a majority in number or a third in value of creditors do not object to its terms. Once protected, the terms of the trust deed become binding on all the creditors and prevent them from pursuing their debt or making the client bankrupt.
Provisional order
An order which protects or secures a claimant’s position before a hearing in a simple procedure action.
Qualified creditor
A creditor who is owed at least £5,000 ise able to petition for the client’s bankruptcy.
Recall
The process of bringing an action back to court to be heard by a sheriff.
Recall of sequestration
A process to end the bankruptcy and restore as far a possible the client, or any persons affected by the bankruptcy, to the position they would have been in if the bankruptcy had not been awarded.
Register of Inhibitions
A public record holding information on individuals who cannot competently enter into property transactions – eg, sell their owned property.
Register of Insolvencies
A publicly accessible statutory register which holds information on the insolvency of individuals and businesses in Scotland. It also holds information on anyone who has been granted a statutory moratorium.
Scottish Public Services Ombudsman
The organisation that handles the final stage for complaints about devolved public services in Scotland including councils and the Scottish government and its agencies and departments.
Sequestration
Sequestration is the term used in Scottish law for entering bankruptcy.
Sheriff clerk
Responsible for the organisation of work of the sheriff court. In the courtroom, they call out the case name and record the decision of the sheriff. In the sheriff clerks’ office, they give advice on procedures and help fill out some court forms.
Sheriff court
This court deals with the majority of civil and criminal cases in Scotland. It has jurisdiction over all civil cases with a monetary value of up to £100,000.
Sheriffdom
The court system in Scotland is divided into six areas called sheriffdoms. A sheriff principal sits as the administrative head of each sheriffdom.
Sheriff officer
An officer of the sheriff court responsible for serving documents and executing orders of the sheriff court.
Sheriff
A legally qualified judge. Sheriffs deal with many debt-related cases, including those involving compensation, contract disputes, bankruptcy, company liquidation and evictions.
Sheriff principal
These judges are the heads of each of Scotland’s six sheriffdoms. They are responsible for ensuring the efficiency of the sheriff courts in their sheriffdom. They also sit in the Sheriff Appeal Court.
Simple procedure
A sheriff court process to provide a speedy, inexpensive and informal way to resolve disputes.
Sist
In Scottish law, sist can mean two things: when someone intervenes in legal proceedings as a third party (eg, as a trustee) or an order that stops or suspends legal proceedings for a time.
Statutory moratorium on diligence
Provides a period of protection during which creditors cannot take any formal recovery action (diligence) against a client for debts owed.
Summary cause
A simplified procedure applicable to civil cases in the sheriff court with a limit of £5,000 in the case of monetary claims. Certain actions to recover heritable property must also be by summary cause.
Summary warrant
An expedited court process which some public sector bodies can use to enforce debts. There is no court hearing. Instead, the creditor presents a list of names and certifies that the legislative requirements necessary to use the process have been met. Currently, creditors using summary warrant can only enforce debts using arrestment, earnings arrestment or attachment.
Time order
A request to the court for more time to pay a credit agreement. Clients can only apply for a time order if their credit agreement is regulated by the Consumer Credit Act 1974.
Time to pay direction
Can be used by the client to ask the court (or tribunal) for an extension of time to pay a debt owed. It is applied for before a decree or decision is awarded.
Time to pay order
Similar to a time to pay direction (above), but it applies post-decree.
Trigger figures
Spending guidelines set by the Common Financial Tool. Theyrepresent levels of expenditure among households in the bottom quintile of the income distribution in the UK.
Trustee
A person who administers a bankruptcy or trust deed. In bankruptcy, a trustee can be the Accountant in Bankruptcy or a private insolvency practitioner. In trust deeds, the trustee must be an insolvency practitioner.
Trustee discharge
The date the trustee is discharged from liability (other than from fraud) after finalising the administration of the insolvent estate.
Vest (seised)
A person is seised or vested in property when it becomes that person’s property by legal right or authority. For example, when a client is sequestrated, their property ‘vests’ with their trustee.
Warrant
A formal, written authority by the court to cite a person to appear before it or authorising certain actions such as searching premises or evicting occupiers. It is also used to signify a document evidencing a right of some kind - eg, in a title to heritable property.
Writ
The document that usually initiates and sets out the details of the claim and legal remedies sought in ordinary civil actions in the sheriff court.