APPENDIX A
EXPLANATION OF TERMS
Charge for payment
The formal demand for payment following a decree. A Sheriff Officer usually serves it on the debtor who is required to pay the debt within 14 days.
Creditor
Any person, business or organisation to whom the debtor owes money.
Debt Arrangement Scheme
A free debt management tool introduced by the Scottish Executive accessed through an Approved money adviser (see www.moneyscotland.gov.uk). It assists people with two or more debts who want to pay what they owe by giving them more time and free from the threat of enforcement (diligence) or bankruptcy.
Debtor
Any person who owes money. In this booklet it means someone who is insolvent and is aiming to have their estate sequestrated.
Decree
A formal order of court which says the debtor must pay money to a creditor. This order can follow court action such as:
- small claim (up to £750);
- summary cause (£750 to £1500); or
- ordinary action (more than £1500).
Estate
Your estate is literally everything of value you own, including any rights you may have to receive money or goods from anyone else.
Petition
A formal application to the court.
Protected trust deed
A trust deed which transfers all of the debtor's estate to a trustee and is not objected to by most of the creditors or by creditors who are owed at least one-third of the debts. It is binding on all the creditors, that is, 'protected'. None of the creditors may then apply for the debtor's sequestration.
Qualified creditor or creditors
A creditor who is owed at least £1500 (or a number of creditors to whom you owe at least £1500 in total).
Sequestration
The Scottish legal term for bankruptcy. Bankruptcy is a formal court process which transfers your property to a trustee.
Statutory demand
A formal notice by a creditor to repay a debt. The demand must be on the proper form and be served by a Sheriff Officer.
Summary Warrant
An order granted by the court to local or public authorities giving the creditor authority to recover amounts of money you owe. This procedure is generally used to recover unpaid rates, taxes, community charge and so on.
Trust deed
A voluntary alternative to sequestration. The debtor can transfer all or part of the estate to a trustee to handle for the benefit of your creditors.