What is a schedule of inhibition in Scotland?
Jason has been battling his debts courageously, but it’s finally starting to catch up with him.
After months and months of unpaid debts, Jason’s creditor has served him with an inhibition court order after obtaining a decree (an official court order with the force of law) through the Sheriff Court.
Jason was baffled. He didn’t have the foggiest idea what an inhibition court order was, let alone what it entailed.
After seeking advice from a professional debt expert, Jason was informed that an inhibition order was a form of diligence used by creditors that was going to have a significant impact on what he could do with his heritable property.
In Scotland, ‘heritable’ property refers to all the land and property you own, whether you reside in them or not.
In this article we’ll breakdown exactly how an inhibition court order works. We’ll also take a look at what the schedule of inhibitions consists of and the role it plays in the inhibition process. The article will also help you further understand the legislation behind serving an inhibition.
How does an inhibition court order work?
If you owe a considerable amount of debt, your creditor has the authority to obtain an inhibition court order against you.
Obtaining a warrant to inhibit a debtor must be granted by either the Sheriff Courts or through a Court of Session process.
Before the 1st April 2008, obtaining a warrant was strictly a Court of Session process. As a result of certain elements of the Bankruptcy and Diligence etc. (Scotland) Act 2007, this was expanded to permit Sheriff Courts the power to warrant an inhibition court order.
There are a number of reasons why a creditor applies for an inhibition court order on a debtor. You can be inhibited in the following ways:
- Your creditor has obtained a decree in the Sheriff Court or in the Court of Session for payment of an outstanding debt or for a specific implementation of an obligation. The decree is enough in itself to authorise the inhibition, nullifying the need for a separate petition for letters of inhibition.
- A document of debt has been registered for execution e.g. in the Books of Council and Session or the Sheriff Court Books where there has been no previous court action.
- Where a person has been prohibited from dealing with all property by a restraining order in terms of the Proceeds of Crime (Scotland) Act 1995 or the Proceeds of Crime Act 2002.
- Any other order of the Judge in the Court of Session.
How does an inhibition order affect me?
As we mentioned briefly, an inhibition order places certain restrictions over what you can do with the property you own.
Under the inhibition order, you will be blocked from selling any of your property. You will also be ineligible to take out any further borrowing or loans on your property.
An inhibition will also put a block on you making changes to the maintenance responsibilities linked to the property.
These restrictions have been implemented to stop debtors discarding of a highly valuable asset like a home. It’ll also prevent you from reducing the amount of equity you have on your property.
The inhibition order is always made against an individual as opposed to a property. Ultimately, this means that despite the restrictions, your creditor does not have the authority to sell the property or ask you to leave. You will still own the property, but what you can do with it will be restricted.
Schedule of Inhibition
A schedule of inhibition must be served on the debtor as an individual rather than a property, and the action being taken must be with regards to the debt owed.
The creditor must also provide a Debt Advice and Information Package alongside the schedule of inhibition for it to be legally binding.
The inhibition generally takes effect at the beginning of the day on which the schedule of inhibition has been served. This is usually straight after the inhibition has been registered in the Register of Inhibitions and Adjudications, where the inhibition complies with the Titles to Land Consolidation (Scotland) Act 1868.
The exception to this process is when circumstances are as follows:
- A prior ‘Notice of Inhibition’ is already registered in the Register of Inhibitions.
- The schedule of inhibition is served on the debtor after the notice has been registered.
- The inhibition is registered before the expiry of the 21 day period that begins on the day on which the notice has been registered.
Schedule of Inhibition Requirements
As a debtor, it’s important to know the requirements for an eligible schedule of inhibition form. The Bankruptcy and Diligence etc. (Scotland) Act 2007 states that the Form of Schedule of Inhibition must contain the following:
- Date of service entered.
- Name and designation of person being served (debtor).
- Sheriff Officer/Messenger at Arms named.
- Is the inhibition ‘on the dependence?’
- Pursuer (the person raising the action) name and designation narrated.
- Is it general or specific?
- If specific, a title number or a Sasines description complying to Schedule D or J of the Conveyancing (Scotland) Act 1924.
- Messenger at Arms or Sheriff Officer signs.
- Statement certifying Schedule is a true copy and must be signed by Messenger at Arms or Sheriff Officer.
Register of Inhibition
The Register of Inhibitions is a register that contains details of people who cannot competently enter into property transactions. The register is in place to notify the public about the identity of these individuals.
You may be placed on the register of Inhibitions if you:
- Have entered into sequestration (Bankruptcy).
- Owe your creditor money.
- Your company has entered in administration
Registration of Inhibition
To register an inhibition a creditor must provide the following:
- The Schedule of Inhibition and;
- The Certificate of Execution if served by Court of Session or;
- The Certificate of Execution if served by a Sheriff Officer.
If you would like a more detailed brief of the regulations, please take a look at The Diligence (Scotland) Regulations 2009.
How long will my inhibition order last?
Generally, an inhibition order will last for five years. During the five year period, you will be legally bound to the restrictions set out. Once the five years are up, the order can either be renewed or wiped away.
Can I get out of an inhibition order?
There are a number of options available to you if you are looking to have you inhibition order axed. You have the opportunity to get out of your inhibition order if you:
- Enter into Sequestration – This option requires a lot of consideration and must be done within the first 60 days of the inhibition order being warranted.
- Pay off your debt in full – If you manage to acquire the amount of money you owe during your inhibition you have every right to pay your debts off.
- Ask for the inhibition to be relieved – You have the right to go to court and ask for the inhibition to be lifted. You may be able to negotiate a time to pay arrangement or defend your case if you feel there has been a mistake.
Get in Touch
If you are looking for further guidance regarding inhibition court orders in Scotland, or if you have any questions relating to the schedule of inhibition, please don’t hesitate to contact us.
At Scottish Debt Expert we offer help and guidance to anybody struggling with debt. Our Glasgow-based staff are always on-hand to chat through any concerns or questions you may have.
We’re available by telephone, email or face to face and will always arrange a call back within 24 hours. Email us at email@example.com or call us at 0141 483 7477 between 9am-5pm Monday to Friday.