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Dealing with Debt: Finding your feet: Advice for you if you are in debt

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6 What can 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 to get back the money 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.

The enforcement of debt, usually following court action, is called 'diligence' in Scotland. There are a number of diligences - commonly used ones being earnings arrestment, bank arrestment, and attachment.

Time to pay

In most cases you can ask the court for time to pay, even after the court has granted a decree for the debt and diligence has started.

You can apply for time to pay a single debt before the court grants a decree by offering to pay by instalments or as a lump sum. If your offer is accepted, you will start to pay your creditor under the terms set out in a time to pay direction (see page 16 for more details).

You can also apply after the decree for time to pay a single debt, for example if your wages have been arrested. If accepted you will start to pay your creditor under the terms set out in a time to pay order.

In both cases the sheriff will look at your circumstances should your creditor be unwilling to accept your offer before deciding whether to grant the order. Once time to pay has been granted, diligences and bankruptcy stop.

To qualify for time to pay a single debt you must be an ordinary individual debtor and your debt must be less than £25,000. The type of debt is important. Broadly speaking time to pay is not allowed for maintenance or capital sum payments on divorce or for debts relating to central or local government taxes.

You can also apply for time to pay more than one debt. See page 9 for more information about the debt arrangement scheme.

Once time to pay has been approved, diligences and bankruptcy are stopped. You can get help with applying for time to pay by approaching a money adviser.

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. You should check to see if your local advice centre offers this service.

Go to the sheet that comes with this booklet which details local advice centre numbers.