Why have I been given this leaflet?
There are a number of circumstances where a creditor (someone you owe money to) must, by law, provide you with this leaflet. It must be provided if they are taking steps to recover the money you owe through a court or legal process or if they intend to petition for your bankruptcy.
DO NOT IGNORE THIS LEAFLET
Running up debt without making payments is a serious matter.
What should I do?
If you can pay your debts, you should speak to your creditors before it is too late to make arrangements to pay. If you can't pay, or are finding it difficult to pay, speaking to your creditors can still help. You can also get free debt advice. This leaflet gives you contact details of organisations that can help you. Contact an office in your area and talk to an adviser about your options.
What legal steps can creditors take against you?
Your creditor can go to court to enforce the payment of your debts. There are several ways they can do this including:
- Arrestment - Bank Arrestment prevents you accessing money in your bank, building society and credit union accounts. Your creditors can apply for money to be transferred directly to them to pay your debts. Earnings Arrestment orders your employer to deduct a percentage of your wage every pay day and pay the money deducted directly to your creditor.
- Attachment - Attachment prevents you from selling your possessions and can lead to a Messenger-at-Arms or Sheriff Officer taking the items to sell at auction to recover the money owed to your creditor. Usually, a creditor cannot attach items kept in your home or items essential to your trade or profession but there are exceptions to this.
- Inhibition - Inhibition allows your creditor to stop you selling, transferring or re-mortgaging your house or land unless you pay your debt to them. It does not allow your creditor to sell your property.
Dealing with your creditors and debts
Money advisers can discuss the options available to you to deal with your debts. You must not ignore your creditors or your debts. Take action as soon as possible and there may be ways to improve your situation. These can include making informal arrangements with your creditors, entering the Debt Arrangement Scheme or setting up a trust deed. You can also apply for your own bankruptcy.
What is Bankruptcy?
You may have received this leaflet because your creditor is going to ask the court to make you bankrupt. Bankruptcy is sometimes called sequestration in Scotland. Bankruptcy has serious consequences for you. It will affect your credit rating for several years and may make it difficult to access credit or bank accounts in the future. Bankruptcy can also lead to the loss of your home, savings, assurance policies and other articles of value, as well as creating difficulties for some forms of employment.
B55266 - DEBT ADVISE LEAFLET 6PP2 2 18/3/08 15:45:13