Register of Insolvencies
The register of insolvencies is a statutory register about the insolvency of individuals and businesses in Scotland.
Adjudication for Debt
Adjudication for debt is a long established but rarely used diligence which is exclusively a Court of Session process. Adjudication for debt gives creditors a right or security over heritable (and some other) property owned by the debtor. It can be used alone or as a follow-on process from inhibition.
Before taking steps to use adjudication for debt, a creditor must be in possession of a decree (or relevant document of debt).
The creditor will normally (although not necessarily) register a 'notice of summons of adjudication' in the Register of Inhibitions and Adjudications. This has the effect of an inhibition against the debtor, limited to the property specified in the action and preventing the debtor from disposing of his property. Once a decree of adjudication is granted, an extract of the decree is registered in the relevant land register (Land Register or Sasine Register as appropriate). An abbreviate of the decree may also be registered in the Register of Inhibitions and Adjudications.
Upon registration, the adjudication effectively gives the creditor a judicial security over the adjudged property, but this does not permit the creditor to sell. It does, however, allow the creditor, if they choose, to raise an action to remove the debtor from the property, grant leases of the property and, through the action of maills and duties, collect rents from tenants.
After the expiry of one year and a day, adjudication gives the adjudging creditor a preference over other creditors, apart from those holding prior or equal ranking securities. During the period between adjudication and the creation of the preference it is possible for other creditors to raise a petition for the bankruptcy of the debtor and thus equalise their position with the adjudging creditor.
It is only if the debt remains unpaid after the expiry of at least 10 years from the granting of the decree of adjudication that the creditor can proceed to the second stage of the diligence and apply to the Court of Session for a 'declarator of expiry of the legal'. In this context the 'legal' refers to the period of 10 years allowed for the debtor to redeem his property following the adjudication. If the debtor does not settle the debt upon the raising of this action, decree will be granted, the debtor's ability to redeem the debt is 'foreclosed' and the creditor becomes the owner and can sell the property.
Part 4, Chapter 1 (Sections 79 and 80) of the Bankruptcy and Diligence etc. (Scotland) Act 2007 will, once commenced, abolish adjudication for debt and consequently rename the Register of Inhibitions and Adjudications. No date has been set for commencement of this provision.
This section of the website is intended to give a broad overview of diligence. It is not a full statement of the law nor does it provide a full description of each of the processes.