Inhibition is a diligence against the heritable property of a debtor. The process is presently provided for in common law. Currently inhibition is effective against all heritable property acquired by the debtor prior to the inhibition. It does not give a creditor a real right over the property and they cannot take action to take possession of, or sell, the property. It has the effect of:
- Preventing the debtor from disposing of their property
- Preventing the debtor granting securities over the property
- Debts incurred subsequent to the inhibition cannot be enforced against the property.
A warrant to inhibit is obtained by 'bill and letters' (except in the case of inhibition on the dependence provided for by Part 6 of the 2007 Act and commenced 1 April 2008). Warrants to inhibit are issued by the Court of Session. Inhibitions are recorded in the Register of Inhibitions and Adjudications.
If the debtor becomes bankrupt or otherwise subject to insolvency proceedings, the trustee or liquidator is able to deal with the debtor's property even though an inhibition exists over it. The inhibiting creditor does, at present, have a certain preference in the distribution of funds ingathered from the disposal of inhibited property.
Changes introduced by Part 5 of the 2007 Act and which are planned to be commenced in December 2008 or early 2009 include:
- The bills and letters procedure will be abolished and inhibition will be authorised by extract decree or document of debt
- The sheriff court, as well as the Court of Session will be able to grant warrant for inhibition
- Clarification of when an inhibition takes effect - to be the date of recording the inhibition in the Register of Inhibitions
- Inhibition will no longer confer any preference in bankruptcies or insolvencies